Category Archives: canada

Trump Team Greenlights Predatory Payday Lending

New Orleans      We can count the days until we pray that’s it is over, but until then the drumbeat of woe is bound to continue.  The gutted Consumer Financial Protection Bureau proved that it really might need a name change as it announced the shelving of Obama-era reforms to payday lending which will exploit lower income consumers rather than protect them.

The Obama rule wasn’t perfect, but it was progress.  Nothing had been done about the usurious interest rates for example, but it had taken positive steps.

There were limits proposed on the number of loans borrowers could take sequentially.  Such limits are critical in blocking the predatory nature of payday lending.  They require loans to be on a common database so that desperate low-income borrowers are not robbing Peter to pay Paul for example.  A study ACORN commissioned by academics in Canada where regulating payday lending has been a major campaign of ours for the last seventeen years found that borrowers were caught in a debt trap cycle for eighteen months or more to resolve the first loan as interests, fees, and penalties pyramided throughout the period.

The second key advance of the Obama rules required an affordability test before the loans were made.  Whether payday lending, subprime lending, basic mortgages or whatever the product, the baseline for any loan to be fair to the consumer has to include an assessment of affordability.

The Trump team eviscerated both of these reforms to greenlight the industry in its continued efforts to exploit low-and-moderate income families.  All this despite CFPB whistleblowers that had documented a stacked house research effort that had been fabricated to a predetermined aim of gutting the Obama regulations.

The industry reportedly collects $30 billion in fees from this predation, making it easy for them to drop $12 million in campaign contributions to Republican lawmakers to grease the wheels.  The Community Financial Services Association of America, their trade association, is doing the happy dance because its rip-offs of lower income borrowers will be able to continue unabated.

Their only claim is that they supply last ditch credit at exorbitant prices to desperate families.  Everyone not on the take from the industry, knows that there are many better ways to provide credit that don’t trap families in permanent poverty.


Google Rolls the Sidewalk Up in Toronto

New Orleans      The old saying was always that “pride cometh before the fall.”  In the case of Alphabet-Google’s Sidewalk visions of grandeur, it turns out pride — and arrogance –came from the very beginning, throughout, before the fall, during the fall, and now after the fall as well.

Sidewalk was one piece of the billion-dollar bets that the mega-tech company makes on the future when times are good for them.  They were going to design the “city of the future.”  Yes, like I said the pride existed from the beginning, even before the plan.  They recruited New York City Mayor Bloomberg’s economic development chieftain to run the venture.  Their basic claim to fame was going to be the tech tools that have made Google a trillion-dollar business on a good day and apply them to the urban space.

Toronto, Canada was to be their showpiece.  They won the right to be the primary developer on a 12-acre plot along the river front, called Quayside, that was controlled by the City of Toronto through Waterfront Toronto and supported by the province of Ontario as well.

The Sidewalk proposal had been breathtaking in its scope, but much of it let to the gasps that come from choking, rather than wonder.  Streets were going to have underground sensors.  Electric transportation would be everywhere.  Housing units would be all equipped to the beams with the latest tech toys.

ACORN raised objections from the beginning.  There seemed to be no plan in the city-of-the-future for sufficient affordable housing for low-and-moderate-income families or really for such families under any conditions .  Sidewalk promised some concessions, but they were never enough to win our support on many levels.  From the beginning the response from Sidewalk executives from top to bottom was, “we know ACORN” based on their experience with ACORN in New York City during the Bloomberg years, but it never yielded serious discussions or modifications.

Alphabet-Google’s Sidewalk also bled from other self-inflicted wounds.  Though asked for a plan for 12 acres, they tried to expand its footprint to 800 acres and had to be pushed back by the city to the original proposition.  In the same way its parent has been plagued by privacy concerns, Sidewalk was never able to give sufficient assurance to anyone about how they would protect privacy with all of this tech-surveillance and monitoring.  Offering to put it in a jointly accessed, but publicly controlled, data bank just didn’t make it.

Then of course there was the other fatal tech affliction:  Silicon Valley libertarianism.  Sidewalk just wasn’t clear about this whole democracy thing.  They wanted a slice of the taxes, and they did not want control by city elected officials of many aspects of the project.

They announced that the new financial realities were causing them to delete part of their dreamscape, so they were pulling out.  Indeed, the financial realities are changing, but this project was DOA long before they rolled up the sidewalk.  The truth is that Sidewalk didn’t understand enough about the city of the present in Toronto or what we and many others were willing to accept in the future.  Now, in the time of pandemic is seems clear that no one is really clear about what the city of the future looks like, but it is clear that the future has to put people first, not tech, and that doesn’t fit well with the Google-world.