How Payday Lenders (Quietly) Donate to Campaigns
March 29, 2012
Salant, Jonathan D.
Payday lenders began to support presidential hopeful Mitt Romney after he criticized the new Consumer Financial Protection Bureau, which now oversees the payday loan industry, as "perhaps the most powerful and unaccountable bureaucracy in the history of our nation." The backing began with payday and car title lenders contributing $427,500 to Restore Our Future, the super PAC supporting Romney’s presidential campaign, between Jan. 13 and Feb. 29. At least half of the funds were funneled through limited-liability companies (LLCs) and other corporate entities, which hide the donations' original source. These actions are legal, as the Supreme Court in 2010 sanctioned unlimited contributions by businesses to super PACs. Donating through an LLC can be helpful for companies like payday lenders, which are controversial due to their offering of short-term loans with double- and triple-digit interest rates. On March 21, Sen. Sheldon Whitehouse (D-R.I.) proposed a bill to force super PACs to report donations of more than $10,000 within 24 hours of receiving them and to name the donor. The legislation would crack down on the use of LLCs to disguise donors' identity.
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