Last month, the Consumer Financial Protection Bureau issued a “framework” for a rule that seeks to make it more difficult for consumers to obtain short-term or “payday loans.”  

At first glance, it defies explanation that the financial regulator would act so aggressively against a product that has high customer satisfaction rates and accounts for less than 5 percent of consumer complaints to the CFPB. It defies explanation until you understand who benefits the most; and it’s not the consumer.  


The CFPB’s rule is actually the culmination of a complex campaign executed by a network of political operatives under the direction, and for the benefit, of major Democrat Party operative Martin Eakes. Eakes is the chief executive officer, and co-founder, of Self-Help Enterprises. By severely limiting the ability for payday lenders to operate, it dramatically increases the market share for a portfolio of alternative products offered by Eakes and the numerous affiliated companies of Self-Help Enterprises. 

Put simply, the rule is designed to increase profits for Self-Help Enterprises (and Eakes) by making the CFPB, DOJ, and FDIC effectively serve as a front for Eakes’ network of “financial reform” organizations. Ultimately, taxpayers will foot the bill for the windfall.  

The products that Eakes offers are not unlike those of your typical storefront payday lender. The biggest difference comes in the form of Self-Help’s genius marketing and branding, and the unique business model that allows them to be profitable. While simultaneously vilifying the payday loan industry, Eakes offers his own subprime consumer loan products and charges overdraft fees - often at significantly higher rates than your standard payday loan. 

Eakes can offer these loans at a lower cost than free-market payday lenders because businesses connected with Eakes are the largest recipients of taxpayer funds through the Community Development Financial Institutions (CDFI) Fund - over $300 million in the last 10 years. This taxpayer money subsidizes these types of loans to low-income families.  

Over the years, Eakes has relied on a front group he co-founded, the Center for Responsible Lending (CRL), as well as government agencies, to ensure that his pockets stay full and his companies stay successful. Between 2008 and 2010, CRL spent at least $2.1 million on Washington lobbyists. Of course, plenty of private companies invest in government outreach and lobbying. However, most aren’t so influential that they can orchestrate near complete control of government agencies like the CFPB and FDIC; and use those agencies to destroy their competition. 

Eakes makes no secret of the interconnected web of his non-profit and for-profit service providers including Self-Help Ventures, the Center for Community Self-Help, Self Help Credit Union, Self-Help Federal Credit Union, Self-Help Enterprises, his preferred front group, the Center for Responsible Lending, and his most powerful asset yet, the CFPB.  

For example, the first president of CRL, Mark Pearce, was appointed by President Obama to head the consumer protection division at the FDIC. Pearce has since been implicated as one of the masterminds behind Operation Choke Point, the Obama administration program that targets legal businesses by intimidating banks into cutting off their banking relationships with certain industries (including payday lenders and gun dealers). 

Eakes’ connections to the CFPB extend at least as high as Steve Antonakes, deputy director of the CFPB, whose personal relationships with both Mike Calhoun, president of CRL, and Eakes, extend back to his time as Massachusetts’s Banking Commissioner. Antonakes’ work in Massachusetts also centered around limiting or destroying the ability for consumers to access credit. 

Between the CFPB’s forthcoming rule on payday lending and Operation Choke Point (at the direction of Mark Pearce), Eakes’ network of operatives in the government’s most powerful agencies are poised to realize his objective – taking down the short-term loan industry and replacing it with products from his own network of service providers.   

If the free-market short-term lending industry is eliminated through regulatory action, the consumer need for such products will still exist. Eakes is poised to fill that need with taxpayer subsidized consumer loans, offered through his vast network of organizations throughout the country.

The Center for Responsible Lending is widely credited with advocating for, and developing the CFPB alongside one of its most closely aligned advocates, Sen. Elizabeth WarrenElizabeth WarrenPorter loses seat on House panel overseeing financial sector OVERNIGHT ENERGY: Nine, including former Michigan governor, charged over Flint water crisis | Regulator finalizes rule forcing banks to serve oil, gun companies | Trump admin adds hurdle to increase efficiency standards for furnaces, water heaters DeVos mulled unilateral student loan forgiveness as COVID-19 wracked economy: memo MORE (D-Mass.). It isn’t hard to see why Eakes, and CRL’s funders Herb and Marion Sandler, invested so much time and money into the inclusion of the consumer bureau in the Dodd-Frank legislation. 

There is no better way to manipulate the market for a product than to control the competition. And there is no better way to control the competition than through the heavy hand of an “independent” and unaccountable regulatory agency like the CFPB.   

In an interview about CRL, Martin Eakes said, “It’s an affiliated research and policy organization that started because we got really angry at the financial services sector, and in 2002 started this organization that has hired fifty lawyers, PhDs, and MBAs to basically terrorize the financial services industry.” There is no doubt that Martin Eakes has not only terrorized the financial services industry, but American consumers as well, threatening to deprive them of the ability to access the products and services that they want and need.

Wise is the senior adviser to the U.S. Consumer Coalition. ( @USConsumers