Pay-day lenders offer small, short-term loans -- typically anywhere from $100-$1000 -- often designed to tide customers over until their next pay-check. But the loans, which come with high finance charges and can carry interest rates of as much as 400 percent on an annualized basis, lead many working-class borrowers to end up digging themselves deeper into debt. As a result, the industry has in recent years become a prime target of consumer advocates and their allies on Congress, who accuse it of preying on struggling Americans, and have sought ways to rein it in. That's led the pay-day lenders to pull out all the stops to fight back -- including spending millions on lobbying and developing a network of websites and other PR tools to promote its interests and attack its critics.
And the list of big-name Washington players who have helped out with that effort is even longer than we told you. In 2008, the Community Financial Services Association -- the major trade association for the pay-day lenders, created in 1999 -- paid over $4 million to the Glover Park Group for "consulting and media" help, according to 990 forms submitted to the IRS and examined by TPMmuckraker. The powerhouse Washington lobbying and PR firm was founded by a team of former Clinton administration staffers including Joe Lockhart, Carter Eskew, and Susan Brophy. It has also employed Howard Wolfson, who ran communications for Hillary Clinton's Senate and presidential campaigns, as well as Republicans like Mitt Romney spokesman Kevin Madden. A Glover Park spokeswoman did not respond to a request for comment from TPMmuckraker about its work with the pay-day lenders.
But the pay-day lenders also have had help from some more controversial figures. Last week, we told you about the industry's attacks on the Center for Responsible Lending (CRL), the consumer-rights group that has been perhaps the most vocal critic of the pay-day lending industry. And back in October, as the Huffington Post reported at the time, an industry front group, the Consumer Rights League, filed a complaint with Congress alleging that CRL had violated lobbying rules by not sufficiently disclosing its activities. The League's largely bogus complaint -- the group's president, Michael Flynn, admitted to HuffPo: "A lot of the things I complained about are technical violations" -- appears to have been another attempt by the industry to harass and weaken CRL.
The League hasn't said who's funding it -- it didn't respond immediately to our request for comment -- but tax forms show it was founded in 2007 by Flynn and two lobbyists for the Federal Strategy Group, a GOP lobby firm. And for a time -- though no longer, it appears -- it shared an address with FreedomWorks, the corporate-funded conservative lobby group run by former GOP Majority Leader Dick Armey, which has been a key backer of the Tea Party movement. Another of the League's founders, Teresa Kibbe, is the wife of FreedomWorks president Matt Kibbe.
Flynn is now "editor-in chief" of Andrew Breitbart's BigGovernment.com, which ran James O'Keefe's undercover ACORN videos. (ACORN "owe Mr. O'Keefe an apology and also a thank you for rooting out these employees," Flynn told Sean Hannity in the wake of the videos' release.) He's also a former top lobbyist for Berman & Company, the firm run by notorious corporate lobbyist Rick Berman, famous for creating industry-funded front groups that have downplayed the risks of smoking, drinking, obesity, and even drunk driving, without revealing their corporate clients. 60 Minutes once called Berman -- known to his friends and enemies alike as "Dr. Evil" -- "the booze and food industries' weapon of mass destruction."
In fact, Berman himself also appears to have direct ties to the industry's PR push. A page on the website ActivistCash.com, which is run by Berman's Center For Consumer Freedom, goes after CRL, making prominent mention of the background in the sub-prime mortgage industry of Herb Sandler, one of CRL's major funders. And as the good-government group CREW noted in a report last year, a website set up by Berman's Center for Economic and Entrepreneurial Literacy has promoted pay-day loans and criticized efforts to regulate the industry.
All of these ties have paid off for the industry, of course. To the frustration of consumer advocates, the Senate's proposal on financial reform won't give the new consumer agency the automatic authority to enforce rules against all pay-day lenders. And the House bill passed in December, though stronger, also was reportedly watered down.