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Predatory Payday Lenders and Debt Collectors Cash In On Over $580M In PPP Loans 

By Anna Peel. Originally published at ValueWalk.

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Washington Post: ‘Paycheck Protection Program money went to firms that have drawn sanctions and received hundreds of consumer complaints’


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Debt Collectors And Payday Lenders Collected Over $580M In PPP Loans

WASHINGTON, D.C. — The Washington Post is reporting that over 1,800 taxpayer-backed Paycheck Protection Program (PPP) loans went to debt collectors and high-interest payday lenders — totaling more than $580 million. According to the analysis, “more than 170 of those recipients have been the subject of a multitude of complaints — each racking up at least 100 with the CFPB.” Among the recipients includes Title Cash, a payday lender that charges up to 456 percent annual interest rates, who cashed in on $3.6 million in taxpayer dollars.

“These are not the kind of companies you would hope to be at the front of the line for government help,” said Derek Martin, spokesman for Accountable.US. “Especially if their history of harming the consumer is there in official records. These companies should pay back the U.S. government at the same rate they are lending to consumers.”

KEY POINTS FROM The Washington Post

  • “Those were just two of more than 1,800 loans that went to debt collectors and high-interest lenders through the Paycheck Protection Program, according to an analysis by The Washington Post. In all, the aid to these businesses amounted to more than $580 million.”
  • “More than 170 of those recipients have been the subject of a multitude of complaints — each racking up at least 100 with the CFPB, according to The Post’s analysis. Twenty-five have been subject to legal enforcement or consumer alerts, many by the CFPB and the Federal Trade Commission.”
  • “While the CFPB does not verify all of the complaint narratives, The Post may be undercounting the number of such companies because some may have received loans under business names that differ from those reported in enforcement and complaint records. In addition, The Post found dozens of cases in which companies did not list themselves as debt-collection agencies despite having public websites advertising such services.”
  • “For example, seven mortgage firms agreed last year to pay civil penalties for problems the CFPB uncovered. The agency found that the mortgage companies were sending misleading advertising to veterans and service members about loans backed by the Department of Veterans Affairs. Their combined penalties totaled $3.6 million — less than half of the $9.8 million they collectively received in forgivable loans from the Paycheck Protection Program.”
  • “Similarly, a group of 17 companies with the same Alabama address and affiliated with Title Cash, a title and payday lender, received loans totaling more than $3.6 million from the program. The Title Cash chain has hundreds of locations across nine states and provides short-term loans with very high interest rates, according to its website. A 14-day loan in Alabama is advertised at 456 percent interest on a yearly basis, for example, and a 30-day loan in Mississippi has a maximum annual percentage rate of 267 percent.”

[Read the full washington post story here.]


The post Predatory Payday Lenders and Debt Collectors Cash In On Over $580M In PPP Loans  appeared first on ValueWalk.

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