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In 'generational moment,' Port of L.A. faces shifting winds in business and politics

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In 'generational moment,' Port of L.A. faces shifting winds in business and politics

The Port of Los Angeles has long been the single busiest seaport in the Western Hemisphere, employing thousands of Southern Californians and playing a critical role in the vast supply chain that underpins both the California economy and that of the United States as a whole.

Together with neighboring Port of Long Beach in the San Pedro Bay, it handles a whopping 40% of all the container traffic from continental Asia.

But today, as Port of Los Angeles director Gene Seroka puts it, this important but largely anonymous institution faces a “generational moment,” a set of challenges crucial for the regional economy and the well-being of many Americans.

Seroka has been leading the seaport since 2014. He recently sat down with the L.A. Times to discuss key issues involving the port.

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We’ve been getting signs of slowing consumer spending. How busy have you been so far this year, and what do you see ahead?

It’s been an extraordinary year. For the first six months of the year, our business is up more than 14%, driven mainly by the strength of the U.S. We also have a dock workers’ negotiation on the East Coast, a drought in the Panama Canal and security issues in the Red Sea leading up to the Suez Canal. Many importers and exporters have told me that fractionally, they’ve shifted some of their allocation our way to hedge against any worsening in those three areas.

You’ve made many trips to Washington, including for three meetings with President Biden. What might changes in the White House and Congress mean for future funding and support?

Well, that remains to be a pretty big question mark. We’ve had unprecedented progress in the area of focus on ports, and a lot of it was brought to light because of the supply chain crunch that we saw during COVID. We saw the bipartisan Infrastructure Investment and Jobs Act that was passed, the Inflation Reduction Act, and now the Environmental Protection Agency call for applications on the Clean Ports Program, which should be announced sometime in the fourth quarter of this year.

What I’ve seen so far is that in the last three years, we’ve submitted applications for more than $1 billion in [federal and state] grant money, and we’ve earned over $380 million. That’s probably our best three-year period that I can recall.

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Depending on what happens in November, can things shift?

The infrastructure law runs through ’26, but based on my own experience, yes. I think we could see more of the same type and better support, or we could see a complete reverse.

What would create that?

Changing policy, changing focus away from the state of California. I don’t want to speculate, but I have seen what it looked like — the lack of access, the lack of any meaningful legislation like the infrastructure act. So, again, I don’t want to speculate, but we’ve had a pretty good run here. This industry, still to this day, even with all the technology and the global trade, it’s still a relationship-based business. And it still is relationships that carry us in Washington and Sacramento today.

And how was your access to and relationship with the Trump administration?

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It was very limited, if nonexistent.

What about tariffs? Biden recently increased tariffs on a wider array of Chinese goods — steel, EV cars, solar cells. And there’s potential for even higher, broader tariffs to come, especially if Trump wins.

Dating back to 2018, the previous administration implemented tariffs on a variety of goods originating from China. Those tariffs were met with retaliatory tariffs that really were very impactful on a negative side for a number of American companies, including the agricultural sector. Flash forward, the most recent tariffs that the Biden administration put in were on $18 billion worth of goods. It’s a very narrow, targeted approach to tariffs. So I don’t see that impacting the Port of Los Angeles. What we’ve seen with tariffs policy, and in some cases rhetoric, is that here at the Port of Los Angeles, the portfolio with China is now down to about 45% [from 57% three years ago].

How much potential do other countries around the Pacific Rim have for becoming alternatives to China in terms of manufacturing?

No one can replace China as a manufacturing hub. But we’ve made up that difference by capturing cargo from other markets, and specifically Southeast Asia – Vietnam, Indonesia, Thailand, to name three. We’ve also seen growth in manufacturing in Mexico. And while some folks would say, OK, you’re building up more products in Mexico to come across the border by truck or rail, but we’re also feeding components into the maquiladora areas like Mexicali here in Baja, California. So there’s still a market for us to be a strong player, especially as Mexico continues to shine in the manufacturing community.

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What about India, which seems to be rising in terms of manufacturing in the global economy?

It is. And I was just in India back in January. I had an opportunity to visit with Ambassador Eric Garcetti. What I can tell you is in the most recent full calendar year, China exported some 260 million 20-foot equivalent units of cargo. India exported 17 million. So while what we see there is opportunity and there is great talent, manufacturing in the same vein that we see in Asia may not happen overnight.

In the early months of the pandemic there were, at one time, more than a hundred cargo ships stuck at sea waiting to berth. What’s to prevent something like that happening again in San Pedro Bay?

Well, that’s job No. 1, in my view. What we did learn with the benefit of history is that this port must remain as a transit facility and not as a warehouse. Unfortunately, back in 2021 and 2022, a number of large importers used this port to store containers. Unbeknownst to us, they had deals with shipping lines to make sure that they could hold their containers here at the port for little to no charge. Once we diagnosed that by doing some data mining through our own system, the Port Optimizer, we were able to start moving cargo again.

No one was trying to hurt us, nothing sinister was taking place. The American consumer was simply buying at a pace that we’ve never witnessed. And importers had to get as much cargo here as quickly as possible, and it was just clogging up the works.

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So now the next thing is going to be, how do we make sure that we can anticipate what’s going to take place next in the supply chain? A lot of that comes with data. I’ve been to Asia five times this year so far, and I’ve been to Europe once. I’m spending a lot of my energy talking to importers and exporters, service providers, leadership at the C-suite level to try to make sure I anticipate as much as possible, what’s happening now and what we can expect in the future.

More recently, we all read about the accident in Baltimore last March when a large container ship crashed into the Francis Scott Key Bridge. What’s the potential for such a mishap here, and what have you done to reduce the risk?

Well, we work hard every day at this, led by our head of public safety, Port Police Chief Tom Gazsi. And while vessel engine failures happen, it’s about how we create protocol to prevent that from going any further. We put a minimum of two tugboats on every ship that comes into this port. And for the larger ones, those workhorse vessels, you’ll likely see four tugs tied to a ship in the event of a power failure or engine failure. Those tugs go into action, put the rear thrusters on, slow down and stop that ship as it’s moving.

Also, our bridge has its legs on land. We’ve got rock formation under the channel near the stanchions to prevent a ship from getting anywhere close to it.

What is the longer-term impact of automation and AI at the port? Do you see that as threatening jobs?

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Here in Southern California, out of our 13 marine terminals right now, we have three that are automated, and there may be more in the future. The automation or robotics that we see on our marine terminals today really is comprised of the land-side equipment, whether it’s to move containers onto truck chassis or onto rail cars, or for retrieval when the truckers come into the terminals to pick up their imports or drop off their exports.

But it’s our belief that while technology is moving faster than ever, we cannot leave the workforce behind. And that’s part of the motivation of why we just cut the ribbon on a new mechanics training facility on Terminal Island. That’s going to up-skill and re-skill longshoremen members so they can work on newer and greener equipment, and in some cases, automated machines.

Secondly, we have designated 20 acres of property here for the nation’s first workforce training campus dealing with goods movement — to bring people in who need training on trucking, warehousing, even coding [and] technology such as artificial intelligence that will be important to this port in the future.

What are the biggest environmental challenges at the Port of L.A.?

There’s nothing more that we want to see than for ourselves, the Port of Long Beach and others to reach this aspiration of a zero-emission port operation. But there are a lot of things that have to take place. We’ve got to be able to accelerate the technology, make it affordable for small businesses to be able to join.

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Please know that of the 20,000 trucks that are registered to do business at the port, more than half are small businesses. We’ve got to make the barriers to entry as plausible as possible. We also have to support them by creating the infrastructure necessary to run these new and cleanest trucks that are possible.

For example, there are 7,500 gasoline stations in the state of California. There are only 46 hydrogen fueling stations. And according to their oversight board, they only work about half the time. There are only 92 high-speed heavy duty truck chargers in the country, less than two per state.

Now, we’ve also been working closely with the shipping industry for the past several years on cleaner and renewable fuels. We call this our green shipping corridor strategy. If we could reduce the emissions from ships moving from our largest trading partner in China, from Shanghai to the ports of L.A. and Long Beach, if we can reduce that emissions by 10%, that would be the equivalent of all the emissions in the Port of Los Angeles for an entire year.

Finally, let me ask you about jobs at the port. What kinds of skills do you look for now and will be looking for in the future?

The interesting thing about this port complex is there are a variety of jobs and skill sets that are always in demand. For example, we talk a lot about the people that actually move the cargo — the longshoremen, the marine clerks, the truck drivers and warehouse folks, the mechanics are all vital to this port. And that’s part of the motivation for us setting up that mechanic center as well as the broader goods movement training campus that I spoke of on the 20 acres of property at the Port of Los Angeles.

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The other piece is that you’ve got a growing community here in this harbor enclave. There are 260,000 residents, a lot of young kids going through school that see this port every day and want to be a part of it. We need engineers, naval architects and others that have expertise [who can] design, build and create for our industrial sector of marine terminals and other cargo moving interests.

And the next big thing obviously will be to put an even deeper emphasis on folks with information technology capabilities, whether it’s a young kid who knows technology because they play video games or those who have taken interest in coding, all the way to folks who are going now to college and grad school studying the sciences to be more involved in technology.

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Biden drops out: How Hollywood is reacting to the Kamala Harris campaign

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Biden drops out: How Hollywood is reacting to the Kamala Harris campaign

President Joe Biden’s decision on Sunday to drop out of the 2024 election and endorse Vice President Kamala Harris as the new Democratic nominee has everyone talking — and Hollywood is no exception.

Spike Lee, Aaron Sorkin, Shonda Rhimes, Mindy Kaling and other powerful industry players wasted no time this weekend weighing in on the political shakeup — which occurred Sunday amid a groundswell of calls for Biden’s withdrawal from Democratic lawmakers and entertainment industry figures.

A number of celebrities were quick to throw their support behind Harris.

“I stood behind her in 2016 when she ran for Senate, I was behind her when she ran as @vp and I continue to stand behind her today,” Rhimes, the prolific TV producer known for “Bridgerton” and “Grey’s Anatomy,” wrote on Instagram.

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“ONCE AGAIN A SISTA COMES TO DA RESCUE,” Lee, the Oscar-winning writer-director known for “BlacKkKlansman” and “Do the Right Thing,” wrote on the social media app.

Democratic candidates have looked to entertainment luminaries for reinforcement for decades. Earlier in this election cycle, a star-studded event featuring Julia Roberts and George Clooney raised more than $30 million for the Biden campaign. (Clooney later urged Biden to quit the race in an opinion piece for the New York Times.)

Others showing their support included “Watchmen” and “Lost” producer Damon Lindelof (who had called on Biden to step aside) and “A Black Lady Sketch Show” creator Robin Thede, who floated the idea of “The Daily Show” host Jon Stewart joining Harris as her running mate.

Sorkin too pledged his allegiance to Harris, after recently penning a guest essay for the New York Times advising the Democratic party to replace Biden with former Republican presidential candidate Mitt Romney.

The “West Wing” and “Social Network” writer borrowed “West Wing” actor Joshua Malina’s X account on Sunday to say, “I take it all back. Harris for America!”

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The International Alliance of Theatrical Stage Employees — a union representing film and TV crew members — also co-signed Harris’ campaign.

“We honor [Biden’s] decision not to run for reelection and are committed to doing whatever it takes to elect Vice President Kamala Harris this November,” IATSE international president Matthew Loeb said in a statement.

“We are united in our mission to deny Donald Trump, who crossed an IATSE picket line in 2004, another four years of assaulting workers’ rights, undermining unions, and jeopardizing our democracy.”

Various actors and musicians backed Harris on social media as well.

Emmy-winning “Abbott Elementary” star Sheryl Lee Ralph posted a photo of herself with Harris on X and wrote “January 2019 I made it clear what I thought about the future of Kamala Harris. Today, I still stand for [Harris].”

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Several musicians also spoke up.

“kamala IS brat,” wrote “Apple” singer Charli Xcx, whose new album “Brat” has been used for many fan edits and memes of Harris in recent weeks.

Other performers — such as Kaling, Cher, Barbra Streisand, Billy Eichner and Mark Ruffalo — simply thanked Biden for his time in office and/or urged Americans to vote in this year’s election.

“Thank you Mr. President,” Kaling, an actor and producer known for “The Office” and “The Mindy Project,” captioned a photo of herself with Biden on Instagram.

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Adidas apologizes to Bella Hadid and partners over 'mistake' with SL72 sneaker campaign

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Adidas apologizes to Bella Hadid and partners over 'mistake' with SL72 sneaker campaign

Adidas has issued another apology amid criticism regarding its SL72 sneaker campaign, which has been linked to the tragic events of the 1972 Munich Olympics. The German sportswear company expressed regret in a statement that specifically addressed concerns raised by model Bella Hadid and other prominent campaign partners.

This follows Hadid hiring attorneys to take action against Adidas “for their lack of public accountability” for putting out a campaign that “would associate anyone with the death and violence of what took place at the 1972 Munich Games,” US Weekly reported Sunday.

Adidas acknowledged the unintended implications of its marketing approach, which coincided with the anniversary of the Munich Olympics.

“Connections continue to be made to the terrible tragedy that occurred at the Munich Olympics due to our recent SL72 campaign. These connections are not meant and we apologize for any upset or distress caused to communities around the world,” Adidas stated in its apology, which was released to TMZ. “We made an unintentional mistake. We also apologize to our partners, Bella Hadid, A$AP Nast, Jules Koundé, and others, for any negative impact on them and we are revising the campaign.”

The controversy arose when Adidas selected Hadid, alongside rapper A$AP Nast, soccer player Koundé and others, to promote its SL72 project, a nostalgic nod to the brand’s iconic 1970s running shoe. The campaign’s timing, however, struck a sensitive chord due to its timing with the 42nd anniversary of the Munich massacre, where Palestinian militants in the Black September group killed 11 Israeli athletes and coaches in a hostage situation that lasted 20 hours. A West German police officer and five of the terrorists also died.

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Adidas was condemned by Jewish organizations and Israel, who criticized the company for linking the campaign with a model known for her strong pro-Palestinian sentiments and Palestinian ancestry on her father’s side. The American Jewish Committee denounced Adidas’ decision, labeling it as either a “massive oversight or intentionally inflammatory.”

In response to the backlash, Adidas emphasized its commitment to diversity and inclusivity in a statement to The Times.

“The adidas Originals SL72 campaign unites a broad range of partners to celebrate our lightweight running shoe, designed more than 50 years ago and worn in sport and culture around the world,” the spokesperson said.

“We are conscious that connections have been made to tragic historical events — though these are completely unintentional — and we apologize for any upset or distress caused. As a result, we are revising the remainder of the campaign. We believe in sport as a unifying force around the world and will continue our efforts to champion diversity and equality in everything we do.”

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Column: Federal regulators step up their campaign against predatory payday lenders and their rip-offs

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Column: Federal regulators step up their campaign against predatory payday lenders and their rip-offs

In 2017, the federal government was poised to give low-income consumers a respite from the myriad abuses and rip-offs visited on them by the payday lending industry.

The Consumer Financial Protection Bureau, created in 2010 as part of the banking reforms enacted after the 2008 financial meltdown, had completed a five-year project to finalize a rule that would prevent payday and installment lenders from predatory practices such as enticing borrowers into loans they couldn’t afford while extracting a vigorish that would make a Mafia loan shark blush.

Then Donald Trump happened. As president, he installed Mick Mulvaney, his budget director and a former Republican congressman from North Carolina, as the bureau’s acting director. Mulvaney effectively canceled the new rule on Jan. 16, 2018, the day it was to go into effect.

A payday advance that is repaid on payday is a payday loan, and fintech cash advance apps that call themselves ‘earned wage access’ are just high-cost lending in disguise.

— Lauren Saunders, National Consumer Law Center

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Two days later, Mulvaney withdrew a lawsuit in Kansas state court that had charged four lenders with saddling borrowers with annual interest rates as high as 950%. And he closed an investigation into a lender that had contributed to his political campaign.

In the words of Sen. Elizabeth Warren (D-Mass.) — who had pushed for the creation of the CFPB — these actions “unwound years of careful CFPB work — all to benefit an industry that has close ties to Mr. Mulvaney and that has contributed more than $60,000 to his political campaigns.”

Mulvaney, absurdly, redirected the agency away from its purpose of consumer protection: “We work for the people,” he told its employees. “And that means everyone: those who use credit cards, and those who provide those cards; those who take loans, and those who make them; those who buy cars, and those who sell them.”

In other words, the CFPB would be protecting not only consumers but those who take advantage of consumers.

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It now looks as if the cop is back on the beat. On July 18, the bureau proposed a new rule making clear that payday advances are loans within the definition of the federal Truth in Lending Act, meaning that companies have to fully disclose all the costs and fees to borrowers — before the borrowers sign any loan documents.

“When interest rates and fees on these loans are high, this can lead to a treadmill of debt that keeps getting faster and faster,” CFPB Director Rohit Chopra said in announcing the new rule.

The bureau also has returned to court. On May 17, it sued L.A.-based lending marketplace SoLo Funds in federal court in Los Angeles, asserting that the firm’s “advertising and disclosures … falsely tout no-interest loans when, in fact, consumers are routinely subject to fees that result in an exorbitant total cost of credit.” When the fees are toted up, the agency says, the true annualized interest rate on the loans can be more than 300%.

SoLo hasn’t yet responded to the allegations in court and didn’t reply to my emailed request for comment.

The bureau has been energized in part by a Supreme Court decision that lifted a shadow over its future. This was a lawsuit brought by some of the targeted lenders contending that the bureau was unconstitutional because it was funded by the Federal Reserve System rather than through congressional appropriations.

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Several pending CFPB cases had been placed on hold while the Supreme Court pondered the appropriations issue. But the court ruled in the CFPB’s favor on May 16 in a 7-2 decision written by Justice Clarence Thomas.

Among those cases was a federal lawsuit the bureau filed in July 2022 against Texas-based ACE Cash Express, which then operated out of nearly 1,000 storefronts in 22 states, including California. The CFPB charged that when ACE borrowers said they were unable to pay back their existing loans, ACE offered them repayment plans bearing new fees but sometimes didn’t tell them a no-fee option was available in some states.

ACE already was subject to a 2014 consent order in which it agreed to pay a $5-million penalty and $5 million in customer restitution, and pledged to offer customers a refinancing of their loans as well as the free option. “ACE has not done as it pledged,” the CFPB charged in its lawsuit.

ACE responded to the lawsuit by citing the case then headed to the Supreme Court. “The days of the Bureau’s unchecked administrative agency power … are, hopefully, over,” its lawyers wrote. “Because the CFPB itself is unconstitutional,” the case should be dismissed, they argued. The trial court put the case on hold, but with the Supreme Court ruling, the case is back on the docket, with briefs due at the trial court over the next two months.

The Supreme Court ruling was long overdue. In the years since Mulvaney tore up the CFPB’s project against payday and installment lenders, that industry underwent a troubling transformation.

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Once operating out of storefronts where customers could cash their paychecks for a fee, it had grown more sophisticated. Customers could now take loans as advances on their paychecks but typically had to provide the lenders with links to their bank accounts so that repayments could be drawn directly from those accounts.

The industry now styled its products as “earned wage access” providers. The firms today have innocuous, homely names such as Dave.com and Brigit; their websites are adorned with stock photos of young people and families evidently basking in the relief of a short-term financial crisis averted. Some claim to charge zero interest on their short-term loans, but that’s misleading.

One should respect the financial tightrope walked by many low-wage households living paycheck to paycheck. The CFPB knows this market; its proposed rule acknowledges that “a significant driver of demand for consumer credit … derives from the mismatch between when a family receives income and when a family must make payments for expenses.” Meanwhile, “employers have a strong incentive to delay the payment of compensation to workers, which drives demand for short-term credit.”

When the true cost of that credit is hidden from the borrowers or they’re forced to refinance, incurring multiple fees, that’s a problem the CFPB was born to address.

“A payday advance that is repaid on payday is a payday loan, and fintech cash advance apps that call themselves ‘earned wage access’ are just high-cost lending in disguise,” Lauren Saunders, associate director of the National Consumer Law Center, says on the center’s website. “The CFPB has seen through fintech payday lenders’ new clothes.”

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Some firms have made deals with employers such as Walmart, Amazon, Uber, Lyft and Kroger to provide advances to workers to be repaid from their next paycheck. In 2022, the CFPB says, more than 7 million workers accessed about $22 billion via these employer-lender partnerships. According to a survey cited by the bureau, most users of paycheck advance services fall below the federal poverty line and more than 80% are hourly or gig workers.

The chief constant tying the new system to the old is fees. About 90% of workers paid a fee for the advances in 2022, averaging about $3.18 per transaction. Since most took out repeated advances, the average annual cost was almost $69.

The CFPB found that among the fees most prevalent in the wage-advance sector are those charged for “expedited” access to cash — which after all is the goal of resorting to paycheck advances in the first place.

But new kinds of fees have appeared. One is often described by the finance firms as “tips” — solicited from borrowers in acknowledgment of the service they’re being provided or to defray the cost the firms ostensibly incur by lending out at 0%.

Those are among the issues in the CFPB’s lawsuit against SoLo. The firm functions as a sort of loan broker — needy customers apply for loans, and other customers provide the loans after judging an applicant’s creditworthiness. (“Earn money with your money,” SoLo tells these small-money lenders on its website. “You lend money to other members to help them replace a tire, cover a bill or for any other reason. They pay you back and add a voluntary tip as a sign of appreciation.”)

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The maximum loan is $575. Borrowers can set a repayment date that is less than a month away; if repayment isn’t made after 35 days, the bureau says, SoLo charges a late fee.

The CFPB says the tips aren’t really “voluntary” at all; lenders tend to judge loan applications based on the size of the “tip” being offered, as SoLo suggests. SoLo also prompts applicants to select among three default “donation” fees that go directly to the firm.

None of the defaults is for $0, and borrowers can’t click to the next page without making a choice. Customers can opt for a $0 donation, but only by finding the option in another part of SoLo’s mobile app as though by accident.

“Virtually all consumers who receive loans incur a Lender tip fee, a Solo donation fee, or both,” the CFPB alleges.

It’s proper to note that this isn’t SoLo’s first rodeo. Last year, the California Department of Financial Protection and Innovation reached a consent agreement with the firm over some of the same practices targeted by the CFPB; SoLo paid a penalty of $50,000 and committed to reimbursing its California customers for their “donations.”

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Also last year the District of Columbia settled its own case against SoLo, in which it alleged that despite advertising no-interest, no-fee loans, the firm compelled “nearly all borrowers to provide monetary ‘tips’ and ‘donations’” that effectively drove up the annualized interest rates to more than 500%, well beyond the district’s 24% usury limit. SoLo paid a $30,000 penalty and pledged that lenders would no longer be able to know that a borrower had offered a tip or how much it would be.

And in 2022, Connecticut authorities imposed a $100,000 penalty on SoLo and required it to reimburse Connecticut customers for all “tips,” “donations,” late fees and other charges. SoLo was barred from the lending business in that state without obtaining any required license.

The battle against predatory lending to small borrowers isn’t over. Project 2025, the right-wing document designed as a manifesto of the Trump presidential campaign, has targeted the CFPB for extermination, calling it “a highly politicized, damaging, and utterly unaccountable federal agency.” The manifesto says “the next conservative President should order the immediate dissolution of the agency.”

(The document was written before the Supreme Court ruled in the CFPB’s favor, so it takes the agency’s unconstitutionality as gospel.)

The specter of rampant Mulvaneyism still lurks on the horizon in a Republican administration: taking government off the backs of the people, so predatory businesses can again saddle up.

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