Free Money: Federal Government Gets Into the Payday Loan Business

As America plunges headlong into socialism, it’s getting hard to keep track of all the industries that our collectivist rulers are in the process of nationalizing. Next up — payday loans:

Deep in the bowels of Donk (DOdd-fraNK Financial abomination bill, whose 2315 pages nobody has read in their entirety), in Title XII: IMPROVING ACCESS TO MAINSTREAM FINANCIAL INSTITUTIONS, section 1205 is a provision titled “Low-cost alternatives to payday loans” in which the government outlines its plans for establishing what is essentially a payday loan advance business…

In Section 1205, LOW-COST ALTERNATIVES TO SMALL DOLLAR LOANS we read:

(a) GRANTS AUTHORIZED.—The Secretary is authorized to establish multiyear demonstration programs by means of grants, cooperative agreements, financial agency agreements, and similar contracts or undertakings, with eligible entities to provide low-cost, small loans to consumers that will provide alternatives to more costly small dollar loans.

…nowhere in the text is it said the loans are even collateralized with something like a deferred paycheck: these loans could very easily be on par or even worse than NINJA loans, in which the ability to breathe and walk at the same time is sufficient for eligibility, while the ability to actually repay never even figures in the loan officer’s mind?

And lastly, what will be the penalties for delinquency and/or charge offs? Since this will come straight from the government’s balance sheet (i.e. the Treasury), without bank intermediation, this will be the perfect forum for the government to lend out at any terms it desires, with the implicit understanding that it has no interest in getting paid back.

Mortgages are already granted based on race rather than ability to pay, thanks to the Community Reinvestment Act, ACORN, and left-wing lawyers like Barack Hussein Obama. Why shouldn’t pocket cash be awarded on the same basis? To quote the Manchurian Moonbat, “When you spread the wealth around, it’s good for everybody” — or at least, everybody who can be counted on to vote for him in 2012.

Considering that loose lending to favored constituencies crashed the housing market in 2008, this program alone may be enough to finish Obama’s work of collapsing the American economy so as to pave the way for totalitarian collectivism.

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On a tip from Anonymous Countermoonbat. Cross-posted at Moonbattery.

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