It appears that payday lenders are being helped by organizations linked to former House Majority Leader Dick Armey. FreedomWorks, a conservative nonprofit organization chaired by Armey, and the Consumers Rights League, an advocacy group run out of the FreedomWorks offices, are actually defending the payday lenders. They claim borrowers can decide for themselves whether to take on these high-interest-rate loans that are loaded with all sorts of other fees and charges. The Consumers Rights League argues that payday loans represent the “democratization of credit” and promises to counter the “numerous, self-appointed ‘consumer advocacy’ groups that are aggressively lobbying to restrict the choices” borrowers have.
Armey made $403,333 in 2006 as chairman of the FreedomWorks Foundation, the organization’s tax-deductible educational group, and another $100,833 as chairman of FreedomWorks Inc., its advocacy and lobbying arm, according to the latest public filings. Interestingly, Armey, a Texas Republican, is also a one-time board member of Rent-A-Center Inc., Plano, Texas. This is a rent-to-own company that made a big push into payday lending in 2005, during which time the former Texas congressman was on its board.
Frankly, I am shocked that even a man like Armey could stoop to the level of defending payday lenders. It would be interesting to see who all contributes money to FreedomWorks. The group raised $4.2 million from the public in 2006, the last figure the organization has made public. I suspect that the payday lenders have given a pretty good bit to this outfit. It’s also of extreme concern that FreedomWorks Foundation enjoys tax exempt status. That doesn’t meet the smell test!
Source: Wall Street Journal
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