There seems to be no shortage of policy ideas proposed by Democrats in Washington that would harm taxpayers, limit consumer choice, or interfere in America’s free market. And next week, misguided consumer-credit legislation that does all three is poised to pass the House Financial Services Committee. It’s a proposal that purports to protect low-income Americans from high interest rate lending, but would actually cut them off from access to credit markets that can be vital for day-to-day life.

The committee’s proposal, titled the “Veterans and Consumers Fair Credit Act” is a particularly disastrous bill that attempts to lock millions of low to middle-income Americans out of short-term credit markets with government applied price controls. If enacted, the government would place a cap on the interest rate a short-term lender is permitted to charge a consumer who is seeking loan. As we’ve seen with nearly every price control, it can do substantial harm – especially to the most vulnerable of our society.

Short-term loans are already highly regulated at the state level, yet the businesses providing them survive because many customers prefer the hours of service and convenient approval that traditional banks may not provide. Insistent that they know what’s best for everyone else, proponents of federal legislation view small dollar short-term lenders as predatory institutions whose sole purpose is to keep their customers in an endless cycle of debt. They like to highlight high Annual Percentage Rates (APR) – which is simply the rate of interest a borrower will pay over the course of a year due to compounding – as their evidence. While these short-term loans typically do carry a high APR, it is extremely rare for a loan to be outstanding for an entire year.

Short-term loans act as a cash advance that are paid back in full at the borrower’s next pay period. So while the loans may indeed carry a high APR, the vast majority of loans are paid back in a matter of weeks or months, not extended for an entire year. It’s misguided to paint an entire industry with a broad brush, and even worse to try legislate or regulate an industry out of business.

Contrary to some of the claims made by proponents of this legislation, small dollar lenders tend to help rather than hurt the people they serve. At a time when fifty percent of low-income families aren’t able to afford a $400 emergency expense, having ready access to providers of immediate credit could be life-saving. According to Pew Charitable Trusts, “sixty-nine percent used it to cover a recurring expense, such as utilities, credit card bills, rent or mortgage payments, or food; and sixteen percent dealt with an unexpected expense, such as a car repair or emergency medical expense.” These are individuals who have nowhere else to turn to obtain a loan in order to pay an immediate bill.

Without this access potential borrowers may either have to miss a payment or default, or spend their efforts seeking an illicit, unregulated market for a loan.

And here, of course, is where taxpayers come in. Eager to ride to the rescue of a disaster scene they would create for consumers, most Members of Congress who support interest rate controls also back schemes authorizing the U.S. Postal Service (USPS) to engage in banking and even small dollar lending. These include Bernie Sanders, Kirsten Gillibrand, and Alexandria Ocasio-Cortez.

Considering that USPS has run up massive losses for 12 consecutive years despite having a monopoly over mailbox delivery  U.S., it is foolish to believe that this government-chartered entity could manage a banking network on a break-even basis, much less profitably. Small-dollar loans have high default rates, and would continue to be that way under USPS management unless qualifications were tightened. The latter outcome is politically unlikely.

As Peter Conti-Brown put it in a report for the Brookings Institution, “It is difficult to imagine politicians, citizens, and customers having the stomach to abide the collection on nonperforming loans when the collector is the government itself.” Thus, the USPS banking  operation would either 1) require direct subsidies from taxpayers;  2) siphon cash from other USPS operations, hastening a taxpayer bailout of the entire postal system; or 3) induce the Service to lobby for expansion into more “profitable” banking areas that would compete with the private sector. Pick your poison, but taxpayers would suffer the ill effects.

In addition to directly crippling access to credit for lower-income Americans, an interest rate cap would interject the federal government between providers and consumers. Bringing the government into any market transaction like this inevitably has an effect on consumers’ ability to access the market. Price ceilings on any good or service reduce supply, and access to credit is certainly no exception.

No third party can objectively state that lenders are charging consumers “too much” for their services. That’s a determination made by customers when they opt to decline loan terms. The interest rate cap empowers government to second-guess consumers—imposing their judgment on how prospective borrowers should value goods and services.

Congress has a long history of imposing regulations intended to help low-income Americans that end up hurting – and they are poised to do so with short-term lending. This a valuable way that low-income Americans can access credit markets when they have financial emergencies. For the sake of low-income consumers as well as taxpayers, we hope this idea — and its postal banking companion — stays out of the legislative hopper and off the floor of the House or Senate.

Thomas Aiello is a Policy and Government Affairs Associate for the National Taxpayers Union.

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No California ballot would be complete without at least one measure about crime and punishment and 2020 will be no exception.

A referendum seeking to overturn California’s landmark ban on cash bail in criminal cases will once again test voters’ sentiments about the treatment of accused lawbreakers.

During previous decades, particularly in the 1980s and 1990s, voters endorsed a tough, lock-‘em-up attitude, culminating in passage of the state’s famous — or infamous — three-strikes-and-you’re-out law aimed at repeat offenders.

At some point — roughly a decade ago — voter attitudes about crime softened and criminal justice reform advocates began winning in the political arena.

When Jerry Brown returned to the governorship in 2011, he strived to undo some of the punishment laws he had signed three decades earlier by reducing penalties for crimes deemed to be nonviolent, diverting more offenders into probation rather than putting them behind bars and making it easier for felons to win parole.

Law enforcement officials objected, saying that fewer offenders behind bars would imperil the public, but in 2014, Brown won passage of a key ballot measure, Proposition 47, encompassing his reforms.

As his second governorship was ending last year, Brown also championed and signed legislation, Senate Bill 10, to eliminate cash bail — a long-sought goal of civil rights and criminal justice advocacy groups.

They argued that the bail system discriminates against the poor who are unable to either post bail themselves or afford the fees of private bail bond agents.

Under the legislation, those accused of minor, non-violent offenses would almost automatically be freed while awaiting trial and other defendants would be evaluated for their flight risk with judges having the final word on who would remain locked up.

SB 10 would, in effect, erase an entire industry, California’s 3,000-plus bail bond agencies, and, not surprisingly, they decided to fight back. Very quickly, a bail industry coalition raised money to qualify a referendum for the 2020 ballot to overturn the new law, whose implementation is now suspended until the voters have spoken.

Bail agents are clearly poised to spend millions of dollars to preserve their livelihoods and now the Service Employees International Union (SEIU) is committing itself to finance a pro-SB 10 campaign.

The SEIU has couched its support for SB 10 in terms of civil rights and protecting poor people from a rapacious industry. However, it also has a financial interest in the outcome because ending cash bail would mean adding thousands of new unionized workers to county probation departments for evaluating defendants.

So the stage is set for another political showdown on crime, with the particularly tricky procedure of a referendum. The question on the ballot will be whether voters want to keep SB10 in force, so the bail agent coalition will be seeking a “no” vote while SEIU and other supporters will want voters to say “yes.”

Initially, it’s difficult to say which side has a better chance of prevailing. A statewide poll conducted by UC Berkeley’s Institute of Governmental Studies in September found that 39% of voters are inclined to vote “yes” to support the new law, while 32% are opposed and 29% are undecided.

There’s a partisan division, with Democrats in support and Republicans opposed, so that should give SB10 supporters an edge. But voters now on the fence will have the final word and that’s where both sides will concentrate what is likely to be their emotion-laden appeals.

CalMatters is a public interest journalism venture committed to explaining how California’s state Capitol works and why it matters. For more stories by Dan Walters, go to calmatters.org/commentary

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Hollywood is now obsessing about increasing ethnic and gender diversity. Good. There’s been nasty racial and gender discrimination in the movie business.

Unfortunately, Hollywood has no interest in one type of diversity: diversity of thought.

In most every movie, capitalism is evil.

Greedy miners want to kill nature-loving aliens in “Avatar.” Director James Cameron says: “The mining company boss will be the villain again in several sequels. … Same guy. Same mother—-er through all four movies.”

One reviewer calls a scene in the recent “Star Wars” movie “a beautiful critique of unregulated capitalism.”

“Unregulated capitalism” is such a stupid cliche. Markets are regulated by customers, who have choices; we routinely abandon suppliers who don’t serve us well.

In the movie “In Time,” rich people live forever by buying more time, which they hoard while arranging for higher prices so poor people die.

I guess rich movie people feel guilty about being rich.

In the new Amazon series “Jack Ryan,” the hero asks a good question about Venezuela: “Why is this country in the midst of one of the greatest humanitarian crises in history?”

Because socialism ruined the country’s economy! But no, that’s not the answer Jack Ryan gives.

“Nationalist pride,” not socialism, is named as the culprit — and the politician who will fix things is an activist running “on a social justice platform.”

The producers reversed reality, portraying leftists as Venezuela’s saviors rather than as the people who destroyed it.

Hollywood reserves praise for people who share their politics. A documentary about Supreme Court Justice Ruth Bader Ginsburg is full of people gushing praise, calling her things like “the closest thing to a superhero.”

“RBG” is a good documentary and Ginsburg is impressive. But so is Justice Clarence Thomas. Hollywood would never praise him like that.

Recently, my former bosses at ABC surprised me by interviewing Thomas. Promotion for the video suggests that they actually let Thomas speak, without sneering at him. Good. But I’m sure no one on the show will be allowed to call Thomas “a superhero.”

Hollywood’s love for the left frustrates actors who lean right. Most fear saying anything because they fear they’d lose work.

Actor Kevin Sorbo spoke out about his conservative views.

Then, recounts Sorbo in my video this week, “all of a sudden, less and less calls. My agent said we’d better part ways. And I made a lot of money for these guys!”

Sorbo says in Hollywood, being a conservative Christian is “like being a double leper.”

He was even banned from a comic book convention.

“They’re the ones who say, ‘We need to be tolerant; we need to have love,’” observes Sorbo. But “they’re the most anti-tolerant people… Every movie, every TV show … there’s always some point, someplace, where they’ll pretty much degrade anybody who’s conservative or Republican.”

When a Republican is shown — someone like president George W. Bush in 2018’s “Vice” — Sorbo says, “They make him as dumb and as hick-y as possible.”

Sorbo’s also annoyed that movies like the latest “Ghostbusters” film shove women into what had been male parts. In the most recent “X-Men” movie, an actress says: “Women are always saving the men around here. You might want to think about changing the name to X-Women!”

“What’s wrong with that?” I pushed back. I like watching female superheroes.

Sorbo replied, “It was created as ‘X-Men.’ We’re in this business now of rewriting everything. … It’s not even politically correct; it’s politically insane.”

Hollywood’s recent movie about man’s first trip to the moon chose to leave out the American flag. When asked about that, the film’s star, Ryan Gosling, said, “This was widely regarded in the end as a human achievement.”

“An American human achievement!” replies Sorbo.

Sorbo’s response to Hollywood’s rejection was to make his own movies. He says his Christian drama “God’s Not Dead” cost $2 million to make but earned $140 million.

Other conservative and Christian movies have done well. Mel Gibson’s “The Passion of the Christ” is America’s highest-grossing R-rated film ever.

Those aren’t my kind of movies, but I’m sure glad Hollywood doesn’t have monopoly power.

Maybe competition will make Hollywood a little less narrow-minded.

John Stossel is author of “No They Can’t! Why Government Fails — But Individuals Succeed.”

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