Why Is The UC System Investing In A Payday Lender Accused Of Trapping Consumers In Perpetual Debt?
by David Lazarus, Los Angeles Times
That’s because the university has invested millions of dollars in an investment fund that owns one of the country’s largest payday lenders, ACE Cash Express, which has branches throughout Southern California.
ACE isn’t an upstanding citizen even by the bottom-feeding standards of its industry.
In 2014, Texas-based ACE agreed to pay $10 million to settle federal allegations that the company deliberately tried to ensnare consumers in perpetual debt.
“ACE used false threats, intimidation and harassing calls to bully payday borrowers into a cycle of debt,” said Richard Cordray, director of the Consumer Financial Protection Bureau. “This culture of coercion drained millions of dollars from cash-strapped consumers who had few options to fight back.”
UC’s connection to payday lending has skated below the radar for about a decade. The university has never publicized its stake, remaining satisfied to quietly reap profits annually from what critics say is a business that preys on people’s misfortune.
Steve Montiel, a UC spokesman, said even though the university has a policy of socially responsible investment and has pulled its money from tobacco and coal businesses, there are no plans to divest from the payday-lending-related fund.
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