An editorial in today’s New York Times criticizes Senator Dodd for attending a dinner at which members of the Online Lender’s Alliance (an industry organization for payday lenders) were present, and then subsequently not acting in consumers’ interests to reform payday lending laws to cap interest rates.
When Arthur Delaney of The Huffington Post went there, he was told it wasn’t an alliance event, although some members would be there. Aides to Mr. Dodd and Mr. Johnson told us the same thing: Forget what it looked like, this was a private fund-raiser by Mr. Johnson for his friend Mr. Dodd, not payday lenders wooing a senator whose committee was considering a bill that could seriously cramp their business.
That bill, sponsored by Senator Richard Durbin of Illinois, caps interest rates on consumer loans at 36 percent. That’s the reasonable limit that Congress placed on loans to members of the armed forces.
It should apply to all American families. Mr. Dodd, who was recently praised after Congress passed a bill limiting abuses by credit-card companies, should follow the same crusading impulse to go after the egregious exploitation of payday loans. He should avoid even the slightest hint that he is cozying up to it.
Too bad the New York Times didn’t do a little fact checking first. Because if they had, they would have realized that Chris Dodd is one of the co-sponsors of S.500, Senator Durbin’s bill. In fact, back mid May, Dodd was one of only 33 senators to vote in favor of an amendment proposed by Senator Bernie Saunders that proposed even stricter usury caps (15%) than the Durbin legislation contains (36%).
It’s clear that everything but the kitchen sink is going to be thrown at Dodd in this election cycle. But he at least deserves accurate reporting.