Thread by @ahsoka2019

Good morning, kids! It's time for everyone's favorite show: Microeconomics and Empathy With Wilbur!
(1/Long Thread.)
vox.com/platform/amp/2…

No doubt, the billionaire Ross is unfamiliar with the payday lending industry. It's incredibly predatory - even AFTER the consumer-protection laws enacted a few years ago.
But some of us are better educated about economics than the *checks notes* Secretary of Commerce 🤔
2/

Let's take a family like mine as an example.
Let's say I've lost my income to the #GOPShutdown .
We have 2 adults and 2 children to feed and a $1000 mortgage to keep up.
So off I go to our neighborhood short-term loan provider to see what they can do.
3/

I will have no trouble finding one, because my state has 1.5 times more payday lender locations than we do McDonald's locations.
Every big-name provider has a store within a 2-mile stretch of one street. So I've got options - yippee!
4/

In I go, at Store #1.
Oops. State law limits loans to a max of $500. That's not nearly enough to cover our basic expenses!
Can I get finish here, then hop to a different company for a 2nd?
Nope. State law limits to 1 loan per person at any time...
5/

Well, $500 is better than nothing. They won't take the house over one missed mortgage payment, and at least we'll be able to eat.
Let's do some paperwork!

Oh. I need a verifiable source of income.
But my whole office is shut down, and no one's there to confirm my employment.
6/

No money for me. I go home and try to not cry in front of the kids, while my non-federal spouse heads out to try their luck.
7/

Success! They're in - employment confirmed, identity approved, all they have to do is sign on the dotted line.
By the end of business tomorrow, 500 smackeroons will appear in our checking account.
We'll have to pay it back in 1 month...
8/

And I sure hope the #shutdown is over by then, because these loan terms are 😱😱😱
Our 1-month loan has a 132.46% APR. And Spouse had to pay $50 in fees at the store.
9/

That's ~11.04% for just this month.
(500 x .1104) + 500 = ......
By the time our month is over, and we're staring down Payback Day, we're going to have to write a $550 check to get clear!
Add in our filing fee, and this loan had an effective ~20% interest rate.
10/

What if the shutdown isn't over? Or I haven't received enough back pay yet to cover it (not to mention our other overdue bills)?
Of course, they're happy to roll over your loan for another month!
That'll be another month of interest. Compounding, of course, so now on $550.
11/

And now my family has entered a cycle of debt and chasing usurious interest that, research has shown, can take YEARS to escape.
Years of payments that could have been a college tuition, a retirement account, a medical need, even just a simple family vacation.
12/

All because the @gop thought their temper tantrum was worth my family's financial security and future, and we could "just get a loan" if we couldn't make ends meet.
13/

This family is relatively secure - with dual income and their own home, they have a cushion.
A single parent, a renter with an unforgiving landlord, someone with higher COL... Their situation is MUCH WORSE than our sample family here.
14/

By the way.
You'll be shocked to learn that, according to Open Secrets, in the 17-18 year:
Payday lenders cumulatively donated over
2 MILLION dollars in political contributions - The vast majority (89%) went to Republicans.
Hmm. I wonder why they're so comfy pushing loans.
15/

PS:
If you've seen ads for 'Native American loan services', they're even worse.
If they're classified as a Native American business, they're exempt from the protection law - no $500 maximum loan, no limit on APR.
So if you're a Native American, you get even more exploitation.
16/

But @SecretaryRoss thinks federal employees or families who lost their SNAP or WIC benefits should just get a loan.
Because @SecretaryRoss, like the rest of the @GOP, is going to bleed you dry to line their own pockets.
#EndTheShutdown
#ShutdownTrump
#ShutdownGOP
/Fin.