GO TO JAIL ALREADY! Sen. Ron Calderon accused of blocking payday lending reform, possibly accepting money to do so
Accused Senator being stripped of titles.
Last month, Catholic Online drew your attention to a pending FBI case against longtime California Senator, Ron Calderon, who has allegedly been engaged in corruption during his long tenure in public office. Now an editorial in the Sacramento Bee accuses Calderon of creating severe debt problems for poor Californians via payday lending.
Payday loans are already illegal in 17 states and the U.S. Military. They are typically short-term loans which can charge over 500 percent interest. The loans are targeted towards the poor, and a typical loan grants about $300. After the loan is made, the borrower typically struggles to repay the debt. For borrowing just $300, an average person may repay up to $800.
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Although nobody makes a person accept a payday loan, a confluence of factors, including marketing, easy availability, desperation, and poor financial education have created a booming industry for lenders.
The industry has been described as predatory and is the subject of legal action in several states. In California, it was Ron Calderon who helped legalize payday loans. The industry made about $3.28 billion in loans in 2011, according to the Sacramento Bee.
Earlier this year, new legislation was introduced to regulate the industry, but that legislation was effectively watered-down, and then killed by Calderon. Incidentally, Calderon has received more than $81,000 from the industry according to the National institute on Money in State Politics.
Calderon is not only responsible for legalizing the practice in California, but he is also responsible for permitting it to continue preying on poor citizens of the state.
How a payday loan hurts unwary consumers.
This may change soon. According to statements from the FBI, Calderon and his family have been accepting bribes from the FBI. An undercover agent asked him to revise the tax law for movie producers, a move for which Calderon requested consideration which was to be paid through his daughter.
After the money was paid, Calderon introduced the legislation, which did not pass. The FBI says this proves Calderon is guilty of corruption. Likewise, the agency says he has been engaging in corrupt behavior for some time.
These allegations will come to more public scrutiny as his case moves, albeit slowly, through the courts.
Presently, Calderon still serves in the California Senate, but he is being stripped of his most influential positions on the basis of the FBI allegations.
The Sacramento Bee explains that Calderon harmed Californians by means of his corruption and collusion with the payday lending industry. Fortunately, with him likely to be exited from California politics by one means or another, the industry may see some badly needed regulation, or hopefully be outlawed altogether.
Californians do not need to be preyed upon by banks and politicians. Life in the Golden State is far from golden and now we know a little better why.
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