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Morning Spew

It’s Tuesday and Personally I’m Thrilled to See My Tax Dollars Supporting Massive Payday Loans

Capitalism is truly running out of places to extract profit, and other links to start your day.

10:04 AM EST on November 29, 2022

(Hedi Benyounes/Unsplash)

In the vacuum where an effective form of pubic assistance could exist, there is always room for a predatory private company to step in. Recently, the New York Times reported that private equity firms including Blackstone are investing in companies that offer a very particular and lucrative kind of payday loan—massive cash advances to recently incarcerated people whose convictions have been overturned. As DNA evidence and social justice organizations have helped to get the wrongfully convicted out of jail in larger numbers, those people are often dumped out onto the street after decades behind bars, and face a long road to possibly massive civil lawsuit payouts. Now, companies like USClaims have been cold-calling attorneys and offering hundreds of thousands of dollars to recently released New Yorkers in anticipation of large payments down the road. 

“If prisoners fail to collect a payout, the advance is essentially forgiven,” The Times reports. “But if the claims come through, which they usually do, the company makes a healthy profit when the exoneree pays in full, often from a settlement that far outstrips the size of the debt.” 

What’s more, the paper notes, these lenders can charge for more interest than the state’s 25 percent cap because the firms argue that the terms of their deals mean they shouldn’t really be regulated as conventional loans. All of which essentially means New Yorkers’ tax dollars from state and city payouts are being funneled back to private firms in the form of, in one instance, $300,000 interest fees. 

Here’s what else is going on: 

  • A new City Council bill would require members to disclose to the City’s Conflicts of Interest Board whether they live in a rent-stabilized apartment—a piece of political pageantry intended to bolster the argument upper-class New Yorkers disproportionately benefit from rent regulation laws. 
  • For a bid starting at $15,000, you can own the crumbling, rusty barge where De Blasio hosted ethically murky political events
  • A judge has ordered Amazon managers at JFK8 to read a 30-page memo banning anti-union firings. 
  • A former Rikers Island corrections officer described hiding drugs in tights to smuggle them into the jail. 

Oh, okay:

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