Lawsuit Filed to Uncover Attempts by Senators and Prepaid Debit Card Company to Pressure CFPB
Netspend Has Given Sen. David Perdue More Than $33,000–Now He’s Bending Over Backwards to Help This Prepaid Predator Save $80 Million by Making Sure It Can Continue to Swindle Hard-Working Americans
WASHINGTON, D.C. – Today, Allied Progress filed suit in the U.S. District Court for the District of Columbia to obtain correspondence that could further expose predatory prepaid debit card provider Netspend and its allies in the Senate, who are seeking to roll back the Consumer Financial Protection Bureau’s (CFPB) rule on prepaid debit cards. The rule in question would provide the hard-working men and women who use these cards with some of the same protections afforded to those using traditional credit and bank cards.
The lawsuit follows yesterday’s Atlanta Journal-Constitution story detailing the extreme measures Sen. David Perdue (R-GA) has taken to benefit Netspend, a company whose PAC and executives have given Perdue more than $33,000 in campaign contributions since 2014.
“Sen. Perdue hopes none of us will notice as he uses procedural gymnastics to move this shady legislation through the Senate as quickly as possible to help a major campaign donor,” said Karl Frisch, executive director of Allied Progress.
He continued, “That is why today, we are going to court to compel the release of any correspondence that might shed additional light on the shadowy efforts being undertaken to help this predatory company by lobbyists, other Senators, and the company itself.
“Netspend just settled fraud charges with the FTC for more than $50 million. It doesn’t deserve the special treatment it is receiving from Sen. Perdue and others. The American people deserve to know what the hell is going on here,” he concluded.
Background on Allied Progress Lawsuit to Release Documents
- Allied Progress Filed FOIA Request with CFPB: The request seeks all communications from Netspend, its lobbyists, and parent company, as well as communications from all Senators co-sponsoring Sen. Perdue’s legislation to repeal the prepaid debit card rule. It notes that such information could be vital to the debate over repeal, which could happen any day. (View Requests – PDF)
- Allied Progress Sought Expedited Handling of FOIA Request, Was Rejected: Allied Progress sought expedited handling of its FOIA requests noting that the issue may come to the Senate floor for debate very soon. That request was rejected. (View Denials – PDF)
- Allied Progress Filed Suit in U.S. District Court for the District of Columbia to Expedite Request: Allied Progress on Tuesday, April 18, filed suit requesting expedited processing for the group’s two FOIA requests to obtain all correspondence between government officials relating to Netspend. (View Legal Filings – PDF)
Background on Perdue’s Push to Repeal Prepaid Debit Cardholder Protections
- Perdue Going to Bat for Predatory Prepaid Debit Card Co Netspend: Sen. Perdue is doing legislative gymnastics to help predatory prepaid debit card company Netspend by trying to kill a Consumer Financial Protection Bureau (CFPB) rule that helps cardholders by giving them many of the same protections enjoyed by traditional credit and debit card customers.
- Consumer Bureau Rule in Question Supported by Industry Leaders: The CFPB rule in question provides basic overdraft protection to the twenty-three million Americans who use prepaid debit cards regularly, and requires card providers to disclose any fees associated with the card. These fundamental protections are supported by the industry trade group The Center for Financial Services Innovation and Green Dot, the largest provider of prepaid debit cards in the United States.
- Perdue Doing Legislative Gymnastics to Bypass Normal Lawmaking Process: Sen. Perdue has successfully sponsored a discharge petition to bypass normal legislative procedures and repeal this rule. Discharge petitions are seldom used by members in the majority party. This is something Perdue has never done on any other issue–ever.
- Netspend Settled $50 Million Lawsuit One Day after Discharge Petition Cleared Senate: On March 31, 2017, the Federal Trade Commission (FTC) settled fraud charges with Netspend resulting in the company agreeing to pay $53 million in fines to customers for engaging in “deceptive” practices.
- Netspend Has Given Perdue More Than $33,000 Since 2014: Netspend and its parent company, as well as current and past company executives, have given Sen. Perdue’s campaign more than $33,000 in just the past few years, according to data from Center for Responsive Politics.
- Vote Could Come as Early as Week of April 24: Now that Perdue has successfully filed a discharge petition, his legislation to repeal the CFPB’s prepaid debit card rule could come to the Senate floor for a vote as early as the week of April 24.
To speak with Karl Frisch about Allied Progress’ lawsuit, please contact Mike Czin at 202-286-7654 or mczin@skdknick.com.
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Allied Progress is a nationwide, progressive advocacy organization that uses hard-hitting research and creative campaigns to hold Wall Street and powerful special interests accountable. Since launching in 2015, the organization has led high-profile campaigns on several issues including reforming the payday lending industry and exposing the those working to cripple the Consumer Financial Protection Bureau (CFPB).