Paul Manafort Gives Bad Name to a Sometimes-Honorable Profession

Lobbyists have a lousy reputation, right up there with members of Congress, and yes, journalists.

But then along came Paul Manafort.

You remember Manafort, the former Trump campaign manager, who also lobbied on behalf of some pretty bad people and then failed to disclose it to the U.S. government.

Stupid, right?

Maybe not. If you lobbied on behalf of some of the people he represented, would you admit it?

In any event, Manafort dirtied the already sullied reputations that lobbyists have.

Which is a shame because lobbyists do play an important function in representing their clients’ interests.

And of course, every “special” interest group has got to have its team of lobbyists.

For instance, take credit unions. So far this year, CUNA has spent $2.565 million on lobbyists, according to the Center for Responsive Politics. Of that total, $2.2 million went to in-house lobbyists who are CUNA employees.

In 2017, CUNA spent almost $4.7 million on lobbying.

NAFCU so far this year has spent $1.3 million on lobbyists; all the money went to NAFCU employees.

The two credit union groups lobbied on dozens of bills and issues, according to records on file with the Senate.

That may seem like a lot of money, but big bankers have outspent both credit union groups.

The American Bankers Association has spent $5.4 million this year and $11 million last year on lobbying.

The Independent Community Bankers of America has spent $3.15 million this year and almost $5 million in 2017.

Notably, Melrose Credit Union spent $300,000 on lobbyists in Washington in 2015 and 2016, at a time when the credit union faced huge losses due to the plunging value of taxi medallions.

Senate records showed Melrose hired outside lobbyists to lobby on taxi medallion valuations.

Despite the best efforts of reputable lobbyists, the lobbying industry continues to be held in low regard.

Several years ago, a House member (who shall remain nameless) asked me where the tall, blonde lobbyists in high heels and lots of money were.

Needless to say, I was flummoxed.

The House member said he’d been listening to Rush Limbaugh and the radio host was bloviating about the good-looking lobbyists on the prowl for congressmen.

If they existed, I never found them and neither did the congressman.

Other Bad Reputations

While we’re on the topic of people with abysmal reputations, let’s consider the payday lenders. Their reputations are probably even lower than lobbyists and maybe even journalists.

And they may not be doing themselves any favors.

Consider the request for an injunction that the Consumer Financial Services Association filed attempting to keep the CFPB from enforcing its payday lending rule.

The rule is scheduled to go into effect in August 2019 and in its request, the association attached affidavits from payday lenders describing their hardships.

First, there’s Judi Strong, president of “Cash In A Dash,” a company that operates three payday lending stores in Eastern Kentucky.

Here’s what Strong had to say: “I have instructed my employees to be very conservative in making loans to new people and to people who do not have a good record of paying back their loans, because we do not want to have such loans outstanding when the business closes.”

She continued, “Similarly, I have instructed my employees not to continue customer accounts that have had multiple NSFs (non-sufficient funds) on repayment attempts. Usually, these customers have very irregular income, and we are able to work with them by reducing their loan amount or continuing to lend to them. I cannot risk these loans still being outstanding by the time Cash In A Dash is forced to shut down.”

So, let me get this straight. Because of the new rules, Strong is going to stop lending to people who have a bad history of repaying their loans. And she’s going to stop lending to people who have multiple “NSFs” on their accounts.

Should she have been lending money to people like that in their first place?

And she claims that in the past, she’s been able to work with these people by lending them more money.

That’s helping them?

Then let’s take J. Patrick O’Shaughnessy, CEO of Advance America, Cash Advance Centers, Inc. (“Advance America”), also a member of the Community Financial Services Association of America.

O’Shaughnessy’s company has more than 2,000 stores in 28 states.

He declared, “… many of Advance America’s current and prospective customers will be ineligible for payday and title loans under the Payday Rule’s ability-to-repay requirements.”

So, many of Advance America’s customers are going to be ineligible to take out loans based on the CFPB’s ability-to-pay requirements. Before you make any loan, shouldn’t a lender assess the borrower’s ability to repay the loan?

All of this may be moot since Acting CFPB Director Mick Mulvaney has said that his agency is going to alter (most likely rescind) the payday lending rule.

So, if the rule goes away, does it mean that Strong is going to be able to resume lending to people who have a bad history of repaying their loans?

And does it mean that Cash Advance can stop evaluating a customer’s ability to repay a loan before they lend to that person?

Am I missing something here?

David Baumann is a correspondent-at-large for CU Times. He can be reached at dbaumann@cutimes.com.