You may recall that General Order No. 2 of the Funny Money column is: “Whenever someone in the financial services industry says anything is being done ‘to serve you better’ break out the gas mask and pooper scooper.”
That rule got one heckuva workout last week and will continue to do so, now that the Consumer Financial Protection Bureau has issued its draft of new payday lending rules. The rules, which are subject to public comments for 90 days and will be implemented sometime next year, include such dangerously radical notions as making sure the borrower is able to pay off a two-week loan in two weeks, that loans can’t be endlessly rolled over to generate new fees, and that a borrower can’t take another payday loan if he or she paid one off less than 30 days ago.
Dangerous, that is, if you’re a payday lender hooked on the prospect of charging an effective annual interest rate of nearly 400 percent on loans that are supposed to last no more than 14 days but, in reality, turn into 10 or more loans in a row for one out of every five new borrowers. An industry that collects about $8.7 billion annually in interest and fees every year now faces the prospect that thousands of lenders could go out of business.
So I wasn’t surprised when one of my sources in the payday lending industry, I.M. Slimy, called in dire need of career counseling.
“This is outrageous!” Slimy said. “This is what I get for better serving borrowers by offering consumers a choice? What’s a barely legal scumbag lender to do?”
How about ... anything else?
Well, you could get into the very lucrative and stable business of plain-vanilla consumer banking or mortgage lending. Mortgage lenders make plenty of money and they’re not even charging 4 percent these days. And JPMorgan Chase CEO Jamie Dimon manages to rake in $27 million in salary, and his worst credit cards don’t even charge 30 percent interest.
“Nah, not sleazy enough,” Slimy said. “I need something I can really put my dead, shriveled heart into. I haven’t spent the last 20 years erasing every scintilla of human decency from my conscience just so I can hand out platinum cards all day.”
OK, what about walking your resume over to the local wise guys at the First National Bank of The Sopranos? You’re already an experienced loan shark and it wouldn’t take you long to pick up the finer points of extortion, money laundering and shakedowns.
“How could I settle for breaking legs when I’ve already been breaking people’s lives? I trap desperate people in these loans and suck up huge chunks of their already inadequate paychecks, so that they lose their cars or get evicted and the whole family ends up out in the street. I wouldn’t get the same job satisfaction just watching some deadbeat hobble around in a cast.”
You’ve got a point there, Slimy — after all, a man’s got to have his pride. Have you thought about going into business for yourself?
Maybe a nice puppy mill?
“I thought about setting up a meth-cooking operation. After all, drugs are nearly as addictive as payday lending. You just get them to try the product once, and then they’re hooked into an endless, degrading cycle of powerlessness and dependency. So, yes, the meth sector is very attractive to me but the chemicals are too harsh. I have very sensitive skin. I’m even thinking of going vegan.”
Well, you’re clearly a sensitive guy, and hearing you go on and on about the wonders of quinoa and kale would be nearly as aggravating as your late-night TV ads.
Still, there must be some job out there for you that is intrinsically deceitful, exploitive, underhanded, sneaky, greedy, nihilistic, parasitic, totally without merit, incomprehensibly still legal and completely destructive to individuals, families and the entire fabric of American society.
“I’ve got it!” Slimy said so loudly that I nearly dropped the phone. “I know exactly the job. It’s a perfect fit for low-life like me!”
And what’s that, Slimy?
“Make that Professor Slimy, pal! You’re talking to the future Dean of Admissions for the re-launch of Trump University!”