Seventeen lawmakers were paid thousands of dollars in campaign contributions by payday lenders and their political action committees within days of taking actions to benefit the industry, raising fresh questions about the sector's influence in Washington, according to a report released Thursday by Allied Progress.
The group's findings focus on campaign contributions to 16 current lawmakers — 14 Republicans and two Democrats — as well as donations to acting Consumer Financial Protection Bureau Director Mick Mulvaney when he was a Republican member of Congress.
The report comes as Mulvaney continues to face criticism over his industry ties. On Tuesday, he told an American Bankers Association conference that while he met with all constituents as a congressman, regardless of donations, he would only meet with outside lobbyists if they contributed to his campaign. His comments provoked outrage from Democrats, who said it proved Mulvaney was for sale.
Mulvaney accepted more than $62,000 in campaign contributions from payday lenders and their PACs when he was a congressman from South Carolina, according to numerous sources, including the Allied Progress report.
Payday lenders lavished contributions on lawmakers as they fought efforts by the CFPB under former Director Richard Cordray to impose a new regulation on the industry, according to the report.
The CFPB payday lending rule was finalized in October. Since being named to head the CFPB in November by President Trump, Mulvaney has said he planned to reopen the payday lending rule and has dropped at least five investigations into payday and installment lenders.
“To call the timing of these contributions ‘mysterious,’ ‘coincidental’ or even ‘innocent’ is to ignore reality: In Washington, nothing happens by chance—campaign contributions least of all," said Karl Frisch, executive director of Allied Progress, a liberal consumer watchdog group. "Tens of thousands of dollars in suspiciously timed campaign contributions that coincide with official actions by these senators and representatives to benefit the payday lending industry casts a shadow of serious impropriety that must be investigated.”
The report details campaign contributions from the payday industry and individual lenders and says those campaign contributions match up with actions taken by lawmakers in support of the payday industry shortly before or thereafter.
For example, the report said Mulvaney, while a congressman, received a total of $18,800 in campaign contributions from payday lenders in 2016 within a month of sending a letter to the CFPB expressing concerns about the bureau's efforts to conduct a rulemaking on small-dollar loans.
The group looked at payday lender contributions to members of the House Financial Services Committee, members that co-sponsored a bill to repeal the CFPB, and members who appeared in its previous payday report in 2015. For the Senate, Allied Progress looked at the top 10 senators who received campaign contributions based on the Center for Responsive Politics. The group then looked for official actions by lawmakers that benefited the payday industry that occurred around the same time, typically within days, that donations were made.
Sen. Richard Shelby, R-Ala., the former chairman of the Banking Committee, accepted at least $46,250 from the payday industry in the days before and after demonstrating support the sector, the report said.
Shelby spokeswoman Blair Taylor said the senator has had "long-standing concerns with the structure of the CFPB and has openly stated that he believes the agency has functioned in an irresponsible and unaccountable manner." Shelby thinks the CFPB needs "more accountability on all rulemaking," Taylor said.
Taylor said allegations that he took action on behalf of payday lenders who contributed to Shelby's campaign were wrong.
"Sen. Shelby votes based on the substance of the measure or amendment brought to the Senate floor," Taylor said. "To suggest otherwise is ridiculous and baseless."
However, the report does not focus solely on Republicans.
For example, Rep. Alcee Hastings, D-Fla., was paid $8,000 in campaign contributions within a month of sending a letter to the CFPB expressing concern about the bureau's efforts to regulate payday lenders. In 2015, he received $20,000 in campaign contributions by payday lenders within a month of writing an op-ed in the Washington Examiner saying there is a need for payday loans.
Sen. Pat Toomey, R-Pa, a Banking Committee member, received $10,000 from payday lenders two days before voting against an amendment that sought to ensure the CFPB's "authority and autonomy to protect consumers from predatory lending," and was paid another $3,000 in the week following the vote.
In addition, House Financial Services Committee Chairman Jeb Hensarling, R-Texas, received $5,200 in campaign contributions the day after voting on measures to cap funding for the CFPB and require that it consult with regulated industries before implementing new rules, the report said.
Rep. Blaine Luetkemeyer, R-Mo., who announced this week his intention to succeed Hensarling, received $5,000 in campaign contributions from the payday industry before voting for a measure restricting the CFPB's ability to hold lenders accountable, the report said.
Rep. Gregory Meeks, D-N.Y., received $2,500 from one payday lender in 2009 after co-sponsoring a bill that would allow payday lenders to charge annual interest rates up to 391%, according to the report.
Meeks vigorously pushed back against the report, which he called "a political hit job" that was "out of line with the reality of my position."
He supports the CFPB's payday rule and voted on the amendment to affirm the bureau's authority to regulate payday loans.
"The decade old bill in question was an attempt to provide some protections for working Americans who, for better or worse, rely on payday lending to make ends meet," Meeks said in an emailed statement. "More importantly, my entire time in Congress demonstrates my commitment to protect small dollar borrowers from abusive lending practices."
Sen. Mike Crapo, R-Idaho, the current banking panel chairman, received $1,000 from a payday loan industry PAC just two days after voting in 2015 against a measure seeking to ensure CFPB authority over predatory lenders.