Sens. Christopher Dodd, D-Conn., and Bob Corker, R-Tenn., have agreed that a new consumer protection agency could write rules for payday lenders, who often charge 400 percent on an annualized basis, but would not have authority to enforce those rules unless it petitioned other regulators, The New York Times reported Wednesday.
The exemption for payday lenders, often considered the most predatory of lending institutions, was made at Corker's request. Dodd and Corker have been hammering out details of a large financial reform bill that is expected to be completed within a week.
The Times said Corker has received thousands of dollars in campaign contributions from payday lenders. As a group, payday lenders tripled their annual spending on lobbying between 2005 and 2008 to $2.1 million.
Corker said campaign contributions, "categorically, absolutely" did not influence his position on the issue.
"Our goal in this legislation should be to level the playing field so that the same rules apply to all involved in lending," Corker said in a statement.
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