How Predatory Payday Lenders Plot to Fight Government Regulation

Months before a federal agency proposed a new rule threatening the profits of exploitative payday lenders across America, the industry’s leaders gathered at a posh resort in the Bahamas to prepare for war.

At the March strategy session, Gil Rudolph of Greenberg Traurig, one of several law firms working with the lenders, described the coming storm this way: “It’s like a tennis match. Every time you hit a ball, hopefully it comes back. Our job is to hit the ball back hard.”

Most of us have a vague sense that corporate America doesn’t like being told what to do, but rarely do we get a front-row seat into how the playbook for resisting federal regulation is written. VICE has obtained exclusive transcripts of this year’s annual meeting of the Community Financial Services Association of America (CFSA), the payday lending industry’s trade group, at the Atlantis Paradise Island Resort. That’s where lenders were taught exactly what it might take to beat back an existential threat to their business.

Payday loan customers typically borrow about $350 for a short-term deal, usually until their next paycheck. As a condition of the loan, they generally give the lender access to their bank account to extract fees of between $10 and $30 for every $100 borrowed. If borrowers can’t pay the loan when it comes due, they can roll over into another loan, triggering more fees and getting trapped in what critics call a cycle of debt. The average payday or auto-title loan (where the customer uses their car as collateral) carries an annual percentage interest rate between 300 and 400 percent.

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