Members of Congress Took Thousands from Payday Lenders Within Days of Taking Official Actions to Benefit Industry

New Report Follows Mulvaney Disclosure That Lobbyists Who Gave Him More Money Got More Access

CFPB Payday Lending Rule in Jeopardy – Congress Awash in Payday Cash Could Vote to Gut Important New Protections


WASHINGTON, D.C. – Today, consumer watchdog organization Allied Progress released a chilling new report detailing how sixteen U.S. Senators and Representatives took thousands of dollars in campaign contributions from payday lenders within days of taking official actions to benefit the industry. The suspicious timing of these contributions and actions taken—by both Republicans and Democrats—raises serious questions of a potential quid pro quo as Congress considers whether it will repeal the Consumer Financial Protection Bureau’s (CFPB) important payday lending rule.

With a business model that traps millions of hardworking Americans in seemingly endless cycles of debt each year, it is hardly surprising that polls show payday lenders are almost universally despised. What is surprising – even bizarre – is seeing certain Senators and Representatives tripping all over themselves to help such an unpopular industry,” said Karl Frisch, executive director of Allied Progress.

He continued, “The truth is, payday lenders wield tremendous power not only over those they are able to ensnare with their risky financial products, but also over the levers of power in Washington. Tens of thousands of dollars in suspiciously timed campaign contributions that coincide with official actions by these Senators and Representatives to benefit the payday lending industry casts a shadow of serious impropriety that must be investigated.”

To call the timing of these contributions ‘mysterious,’ ‘coincidental,’ or even ‘innocent,’ is to ignore reality: in Washington, nothing happens by chance—campaign contributions least of all. Conversations always happen, whether in person at high-dollar, private fundraisers, or during Capitol Hill’s most frequent activity: call time,” he concluded. 

Members of congress featured in “Payday Puppets: How More Than A Dozen Members of the U.S. House and Senate Were Showered with Thousands of Dollars in Campaign Cash by Payday Lenders Within Days of Taking Official Action to Benefit the Industry,” include: Sens. Mike Crapo (R-ID), Pat Toomey (R-PA), Tim Scott (R-SC) and Reps. Alcee Hastings (D-FL), Jeb Hensarling (R-TX), Will Hurd (R-TX), Blaine Luetkemeyer (R-MO), Patrick McHenry (R-NC), Gregory Meeks (D-NY), Steve Pearce (R-NM), Bruce Poliquin (R-ME), Ed Royce (R-CA), Pete Sessions (R-TX), Steve Stivers (R-OH), and Kevin Yoder (R-KS).

Former Rep. and current CFPB “Acting Director” Mick Mulvaney also appears in the report as a “dishonorable mention.” As a member of Congress, he sent a letter to the CFPB “expressing concern about the agency’s proposal to rein in payday lending and other short-term credit.” In the days prior to and following the letter, Mulvaney received $18,800 in campaign contributions from the payday lending industry, including $9,000 in the three days prior to sending the letter and another contribution the day after it was sent.

Key Findings from the Report

Though It Includes Many Other Examples:

  • Sen. Richard Shelby (R-AL): Accepted at least $46,250 from the payday lending industry in the days before and after taking official actions to help the industry.
  • Sen. Mike Crapo (R-ID): Two days after taking $1,000 from a payday lending industry PAC, Crapo voted against an amendment “that would create a deficit-neutral reserve fund” to “ensure the Consumer Financial Protection Bureau has the authority and autonomy to protect consumers from predatory lending.”
  • Sen. Pat Toomey (R-PA): Two days after joining Crapo in voting against the aforementioned amendment, Toomey took $10,000 from the payday lending industry followed by another $3,000 in the five days following his vote.
  • Sen. Tim Scott (R-SC): Just days after voting against an amendment that would “ban individuals convicted of fraud related to financial transactions, including predatory lending to veterans, from generally advertising or soliciting non-publicly traded securities,” Scott took $2,000 from a payday lending industry.
  • Rep. Alcee Hastings (D-FL): Hastings routinely takes actions to benefit the payday industry within days of taking their campaign cash. Case in point, in the days after authoring an op-ed defending the payday lending industry in the conservative Washington Examiner, he received $20,000 in campaign contributions from the industry.
  • Rep. Jeb Hensarling (R-TX): The powerful chair of the House Financial Services Committee voted to cap funding for the CFPB and require it to “consult” with bureau-regulated industries “before implementing new rules.” The next day, Hensarling received $5,200 in campaign contributions from the payday lending industry.
  • Rep. Will Hurd (R-TX): Days after co-sponsoring legislation to repeal the law that created the CFPB, which regulates payday lenders, Hurd received $2,700 in campaign contributions from the payday lending industry.
  • Rep. Blaine Luetkemeyer (R-MO): One of the payday lending industry’s favorite members of Congress, Rep. Luetkemeyer often takes actions to benefit the industry within days of taking its campaign cash. For example, he received $5,000 in campaign contributions from the payday lending industry before voting to cripple the CFPB ability to hold industries like payday lenders accountable.
  • Rep. Patrick McHenry (R-NC): The week after sending the CFPB a letter “expressing concern” over the bureau’s work to rein in the worst abuses of the payday industry, Rep. McHenry received a $2,000 campaign contribution from a payday lending industry PAC.
  • Rep. Gregory Meeks (D-NY): After co-sponsoring a bill that would allow payday lenders to charge annual interest rates up to 391 percent, Rep. Meeks received $2,500 in campaign contributions from the payday lending industry.
  • Rep. Steve Pearce (R-NM): Four days after sending a letter to the Attorney General and FDIC protesting Operation Choke Point, a Department of Justice effort opposed by payday lenders that targeted unscrupulous lending practices, Rep. Pearce received $2,000 in campaign contributions from the payday lending industry.
  • Rep. Bruce Poliquin (R-ME): Within days of voting to cap funding for the CFPB which regulates payday lenders and requiring the bureau to consult with bureau-regulated industry before implementing new rules, Rep. Poliquin received $3,500 in campaign contributions from the payday lending industry.
  • Rep. Ed Royce (R-CA): Three days after voting to weaken the CFPB by subjecting its funding to additional bureaucratic red tape, Rep. Royce received $3,000 in campaign contributions from the payday lending industry.
  • Rep. Pete Sessions (R-TX): Three days before voting for legislation designed to undercut Operation Choke Point, a Department of Justice effort opposed by payday lenders that targeted unscrupulous lending practices, Rep. Sessions received $3,500 in campaign contributions from the payday lending industry.
  • Rep. Steve Stivers (R-OH): The day after sending a letter to the CFPB “expressing concern” over the bureau’s work to rein in the worst abuses of the payday industry, Rep. Stivers received $2,000 in campaign contributions from the payday lending industry.
  • Rep. Kevin Yoder (R-KS): No member of Congress has taken more money from the payday lending industry than Rep. Yoder. The investment has paid off time and again. After voting to cripple the CFPB ability to hold industries like payday lenders accountable by changing its structure, Yoder received $5,000 in campaign contribution from the payday lending industry.

More Background on Payday Lending:

Payday lenders trap 12 million Americans in difficult to escape cycles of debt each year with interest rates as high as 400 percent—all while raking in $46 billion annually. When Congress created the CFPB in 2010 as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act, it charged the bureau with overseeing the payday lending industry, among other responsibilities. The CFPB detailed the damage caused by payday lenders, finding:

  • Only 15% of payday loan borrowers are able to repay their loans on time. The remaining 85% either default or take out a new loan to cover old loan(s).
  • More than 80% of payday loan borrowers rolled over (renewed) their loans into another loan within two weeks.
  • More than one-in-five new payday loans end up costing the borrower more in fees than the total amount actually borrowed.
  • Half of all payday loans are borrowed as part of a sequence of at least ten loans in a row.

It is findings like these that propelled the CFPB to carefully consider over a number of years and eventually promulgate a tough new rule designed to protect consumers from payday lending industry-induced debt cycles. It’s no surprise that research from The Pew Charitable Trusts found Americans favor more regulation of the payday lending industry by a margin of 3-to-1. Yet, these important safeguards are now under attack by payday industry-backed politicians in Congress and CFPB “Acting Director” Mulvaney who took more than $60,000 in campaign cash from payday lenders before his legally dubious installation by President Trump in November.

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