Government Lawmakers Are Attempting To Drive Out Online Lenders
Many people turn to online lenders to get the money that they need. This is especially true in states that have banned store front payday lenders. Now banks and electronic payment processors are being told they need to stop working with these online lenders. Can they do this? Do they have the right to step in and tell them what business they can and cannot do?
The Department of Justice as well as the Federal Deposit Insurance Corp. received a letter, where 31 GOP lawmakers are saying that government organizations are stop legitimate business activity. This legitimate business activity that they are targeting is loans that are made over the internet. The lawmakers are saying that these loans have high interest rates and are not good for the people; this is the stance they are taking and sticking with.
Both departments had received the letter later in the same month that the Justice Department had sent out multiple subpoenas. These subpoenas went out to banks and electronic payment processors who worked with online lenders. There were other types of businesses that the banks and electronic payment processors worked with, but it was primarily the online lenders that they worked with.
To many it looks like they are targeting online lenders only. The Department of Justice insists that this is not what is going on. They say that they are cracking down on a large range of fraudulent merchants, there are other businesses involved.
The issues seems to be though that they are also going after business that are legitimate and are not trying to commit fraud. There is no line drawn between those who do and do not if they are in the same industry. To many online lenders this feels like a modern day witch hunt, and they are the ones who are in trouble.
There are many GOP lawmakers in Washington that believe that these lawmakers are bullying these online lenders and are trying to intimidate them to stop running their businesses. They are doing what they can to put that to a stop, as it is their right to run a legitimate online lending business. It may take a little bit of time for lawmakers to leave them alone, but they do not plan to give up.