Morning Must Reads: Policy Matters in Payday lending and Fracking

Unless you have been away for two weeks, you will note I have been posting a lot about House Bill 2191, which if enacted would legalize predatory payday lending in Pennsylvania.

If you listen to only the policymakers pushing this legislation, you would conclude this bill is a common-sense reform aimed at boosting consumer protection. The reality is quite different since the bill opens the door to a kind of predatory lending that exploits working families and destroys jobs

But for the keen eye of Community Legal Services of Philadelphia and the Center for Responsible Lending, this bill might have moved through the state House with little attention. A marker of the deceptive tactics being used to push HB 2191 is the fact that so far 13 co-sponsors of the original legislation have withdrawn their support.

I bring this up this morning in part because The New York Times has a disturbing story on motor vehicle fatalities among oil and gas workers. It turns out that oil and gas workers are exempted from federal highway safety regulations that limit the hours of work for drivers.

Much like the payday lending industry today, the oil and gas industry in the 1960s argued it needed this exemption from regulation. The exemption they got is costing people their lives as natural gas extraction expands.

Over the past decade, more than 300 oil and gas workers like Mr. [Timothy] Roth were killed in highway crashes, the largest cause of fatalities in the industry. Many of these deaths were due in part to oil field exemptions from highway safety rules that allow truckers to work longer hours than drivers in most other industries, according to safety and health experts.

Many oil field truckers say that while these exemptions help them earn more money, they are routinely used to pressure workers into driving after shifts that are 20 hours or longer.

“Just because you are on an oil field site does not make you any less vulnerable to the effects of fatigue!” Garr Farrell, an oil service driver in Ore City, Tex.,  wrote last year to federal highway safety regulators. In his letter, Mr. Farrell complained that his managers had used the oil field exemptions to force him to wait, without anywhere to sleep, for 36 hours at one well site before he could unload his drilling supplies and get back on the highway...

Oil and gas workers also crash because their trucks are frequently in disrepair, the police say. For example, data from the Pennsylvania State Police indicates that 40 percent of 2,200 oil and gas industry trucks inspected from 2009 to this February were in such bad condition that they had to be taken off the roads.

Oil service companies also often circumvent highway safety rules.

Speaking of industries that have resisted efforts to make the world economy safer, the Pittsburgh Post-Gazette has an excellent editorial this morning on JPMorgan's surprise loss of $2 billion on credit default swaps. What you ask? Heidi Moore at Marketplace has a great explanation of what happend.

The announcement last Thursday by JPMorgan Chase CEO Jamie Dimon that the bank had just lost $2 billion in complex, risky trading delivered several messages to Americans.

The first — not new — is that even the nation's biggest bank can engage in enormous ill-advised transactions that can go sour, shattering the trust of their customers. These institutions' management, with people like Mr. Dimon in the lead, argue that they know how to manage money and make it grow. They argue further that they do what they do best, free of government oversight and regulation...


The most urgent message in all of this is that effective government regulation — four years after the banks and Wall Street houses plunged America into recession and were bailed out by the taxpayer — needs to be put into place. The Wall Street Reform and Consumer Protection Act, the so-called Dodd-Frank bill designed to upgrade federal regulation, was signed into law in July 2010.


Yet vaunted financial leaders such as Mr. Dimon have fought the measure, waging war with the government over the regulations implementing the law. No fewer than nine bills in Congress would weaken its provisions. It also doesn't help public perceptions when bank executives making up $14 million a year have to be fired or forced to retire for colossal trading mistakes.

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