North Carolina Has OutLawed Payday Lenders-- But Patrick McHenry Is The Industry's Champion Even More So Than Debbie Wasserman Schultz

Patrick McHenry got into Congress just as DWT was getting started in 2005-- and we've watched for over decade as he built a career based on blatant and unaccountable corruption, using his position on the House Financial Services Committee to raise $3,717,511 from the Finance Sector he's supposed to be protecting the public from. This year alone, the Finance Sector has given McHenry $1,176,225 in legalistic bribes, the 4th most of any member of Congress other than Speaker Paul Ryan, Majority Leader Kevin McCarthy and Wall Street's favorite Senate errand boy Patrick Murphy. It's almost unfathomable that a reform-minded good government city like Asheville would be represented in Congress by someone as corrupt as McHenry. Unfortunately, though, the Republican legislature has drawn NC-10 to negate Buncombe County's voice with Hate Talk Radio listeners in Catawba, Lincoln, Gaston, Cleveland and Rutherford counties.

This year the Democratic Party has gotten behind Andy Millard, a first time candidate from Polk County who is a financial planner, author, former teacher, principal and small business owner. You can learn more about Andy and the issues he's highlighting in his campaign here on his official website or on his Facebook page. We asked Andy to help us understand the eye-popping relationship between McHenry and the predatory Pay Day Lending Industry which we've been through the actions of corrupt Democrats like Debbie Wasserman Schultz and Patrick Murphy but is one of those areas of Congress where guilt is shared equally on both sides of the aisle. As you read his guest post, please consider contributing to his grassroots campaign by tapping the thermometer on the right.


Here’s Why People are Fed Up with Congress
By Andy Millard



Want to see a microcosm of everything that’s wrong with Congress in 2016? Just look at my opponent, six-term incumbent Rep. Patrick McHenry. He is a career politician whose influence in Congress comes in part from the immense amount of money he raises from unsavory institutions. And he pays them back by doing their bidding. His relationship with the payday lending industry is a perfect example.

Payday lenders are illegal in my home state of North Carolina. Their customers-- everyday folks living paycheck-to-paycheck-- take out short-term loans with interest rates as high as 400% or more. According to the Consumer Financial Protection Bureau (CFPB), four out of five borrowers are unable to repay the loan on time (usually two weeks), so they roll it into a new loan with even more interest and fees. The majority of borrowers end up paying more in fees than they borrowed to begin with. Bottom line: the industry makes big profits by driving struggling families into a downward cycle of debt.

Numerous groups, including a broad coalition of religious groups, have condemned payday lenders and their usurious practices. So you would assume a Congressman representing North Carolina would never support the payday lending industry.

You would be wrong. Patrick McHenry is one of payday lending’s best friends in Congress. He has spoken against proposed tighter regulations on the House floor as recently as last month.

Why? Follow the money. Payday lenders are very profitable-- and they use some of those profits to support members of Congress who support them, including Mr. McHenry. The following is a litany of his entanglements with payday lenders:

In January 2011, McHenry was the keynote speaker at the Community Financial Services Association conference at the plush Westin Diplomat Resort and Spa in Hollywood, Florida. The CFSA is a trade group created by payday lenders to fight laws that might hinder them from taking advantage of those in need. Their biggest enemy is the afore-mentioned CFPB, which is a government agency created to help consumers avoid being ripped off in financial transactions.

According to the CFSA conference brochure, the gathering would answer such burning questions as, “Are there ways that I can maximize long-term profits and minimize regulatory risk?”; “What can I do to avoid getting sued?"; and, “What’s next for the Consumer Financial Protection Bureau?”

Apparently, McHenry paid close attention to that last question--  that March, he co-sponsored a bill to cripple the CFPB’s ability to protect Americans from payday lenders, and was promptly rewarded with over $30,000 in contributions from the payday lending industry a few days later. Perhaps coincidentally, a few weeks later, McHenry very publicly antagonized Elizabeth Warren, the then-leader of the CFPB, accusing her of lying as part of his campaign to undermine the agency.

On August 22, 2013, McHenry signed a letter criticizing the Department of Justice’s efforts to punish payday lenders. The payday loan industry had donated almost $13,000 to McHenry the previous month, and they gave him another $2,600 after the letter was sent.

In October of 2014, McHenry again spoke at a conference for payday lenders. This time, he was the keynote speaker at the FiSCA Conference and Exposition at the Cosmopolitan Hotel in Las Vegas. Similar to the CFSA, the Financial Service Centers of America (FiSCA) is another group that regularly works to minimize regulation of the payday loan industry.

McHenry gave his FiSCA Conference address on October 10. According to disclosure forms his PAC, the McHenry Leadership Fund, filed with the FEC, McHenry received $50,000 from FiSCA and its affiliated companies on October 17-- just one week after he spoke at their conference. On November 17, those same forms show, he received ten donations from FiSCA board members in one day. Those donations added up to $9,500. That’s almost $60,000 from FiSCA, within a month of speaking at their conference. When you add it to the $15,000 McHenry also received from CFSA board member Dan Adams on November 17, that total amount that McHenry accepted from payday lenders in one month becomes $75,000.

In January of 2015, McHenry was named Vice Chairman of the House Financial Committee, where he found himself in an even better position to antagonize the CFPB. Just one month later, he voted against protecting veterans from predatory lending practices. In March, he co-sponsored one bill that would abolish the CFPB, and co-sponsored another that would slow it down while limiting its funding. He received a $5,000 check from the National Installment Lenders Association at the end of March, and then another $2,500 from the Online Lenders Alliance at the end of April.

That June, McHenry signed a letter criticizing the CFPB director, while voting for legislation that would decrease government scrutiny of the payday lending industry. Two weeks later, McHenry received $2,000 from the American Financial Services Association, which lobbies against the CFPB on behalf of installment loans, which are similar to payday loans. Then in July, he co-sponsored yet another bill attempting to abolish the CFPB. On September 14, he received a total of $4,500 from the American Financial Services Association.

Last October, the nonpartisan Campaign for Accountability called for an ethics probe of McHenry due to the amount of money he’s accepted from the payday loan industries in proximity to acting in their favor.

Payday loans are illegal in Patrick McHenry’s home state, and he knows it. Yet the payday loan industry has donated hundreds of thousands of dollars to his campaigns and PACs. He speaks at their conferences, and argues on behalf of their interests in Congress. As Patrick McHenry’s opponent in North Carolina’s 10th Congressional District, I have called for him to return any and all contributions he has received from payday lenders and their employees, as well as the PACs who have donated to him on their behalf.

No wonder Congress’ approval rating is in the cellar. It’s a rotten system that results in rotten legislators. We can change this mess, but it’s going to take a new group of clean politicians. Despite what some might have you believe, the VOTERS alone can fix it.