Courtesy of
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The question is: Who loves you, baby? Before you automatically jump aboard the anti-business bandwagon, ask yourself, do the people that oppose payday lenders understand, or care, that sometimes people come up short for money and need a little help?

Should Blacks be up in arms about the financial realities of borrowing at high rates? Black politicians, community activists and pastors spout misleading rhetoric and biblical teachings against this industry and falsely accuse this industry of having a long history of exploiting African Americans. The lending industry’s opponents ridicule it as “immoral,” “unethical,” “abusive.” In the interest of Blacks evolving business mindsets, it’s necessary that we remind these self-appointed reformers that their anti-commerce efforts are well-meaning but unrealistic interferences.

Who says the payday loan industry is fleecing the poor? Black Americans’ leadership class has a tendency to ridicule their profession, but businesses in this segment provide fast cash and no credit checks. They are more our friends than forces about to save us from ourselves.

Anti-commerce forces have been pushing new rules hurt the Payday Loan industry. Regulation being pushed by these reformers will stymie revenues in the $6 billion payday loan industry and block growth.

The other side of the story is represented by Florida Rep. Alcee Hastings. The Black congressman from Miami admits to being “one of us” and has used payday loans. Hastings has not only used loan services but wrote a letter to the Consumer Financial Protection Bureau (CFPB) expressing concern about efforts to regulate the industry. Hastings also wrote an op-ed in The Washington Examiner in support of the industry.

The payday lenders are pure fodder for the nation’s politicians. State legislatures across the country are taking steps to regulate payday loans. Fifteen states and the District of Columbia have either capped rates leading to payday lenders shutting their doors or banned them outright.

Blacks represent a quarter of payday loan customers. Under Trump appointee Mick Mulvaney, the CFPB is making it easier for predatory lenders. In a year in which the industry has gone from villain to victor, the result of a concentrated lobbying campaign that has culminated in the Trump administration’s loosening regulatory grip on payday lenders and a far friendlier approach by the industry’s nemesis, the Consumer Financial Protection Bureau.

Payday industry foes liken the industry to structural racism against Black consumers. Revenues for the payday loan industry will shrink under a new U.S. rule restricting lenders’ ability to profit from high-interest, short-term loans.

The current business model relies on borrowers needing to refinance or roll over existing loans. Under the new rule, the industry’s revenue will plummet by two-thirds. The long-anticipated rule must survive two major challenges before becoming effective in 2019. Republican lawmakers, who often say CFPB regulations are too onerous, want to nullify it in Congress, and the industry has already threatened lawsuits.

The payday lending industry provides needed, short-term service to the working poor. Taking away their access to these lines of credit means many Americans will be left with no choice but to turn to the unregulated loan industry, while others will simply bounce checks and suffer under the burden of greater debt.

William Reed is publisher of “Who’s Who in Black Corporate America” and available for projects via

William Reed

William Reed is President and Chief Executive Officer of Black Press International. He has been a Media Entrepreneur for over two decades. A well-trained marketing and communications professional, Reed...

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