Steal from the poor, give to the rich?
Liberal billionaire Tom Steyer, who is running for President as a Democrat, is facing accusations that his bank takes advantage of low-income borrowers.
A bank founded by Tom Steyer, a hedge-fund investor who made billions and has been an outspoken critic of President Donald Trump is being accused of taking advantage of low-income borrowers through a bank he co-counded with his wife, Kat Taylor.
via the San Jose Mercury News:
Beneficial State Bank — which Steyer co-founded with his wife, Kat Taylor, and served as board chairman until joining the presidential race in July 2019 — has filed lawsuits and won court judgments against 1,800 borrowers who fell behind on their payments over the past three-and-a-half years, out of more than 22,000 total loans, according to court records and data provided by bank executives.
Most of the lawsuits were concentrated in some of California’s poorest Central Valley counties. One lawyer who’s represented borrowers in numerous car lending cases called the bank’s litigation strategy the most aggressive he’d seen by an auto lender to collect on loans.
In interviews, a janitor, meat cutter, preschool teacher and hotel manager who defaulted on loans from Beneficial and were sued by the bank described spiraling into debt, unable to keep up with annual interest rates as high as 27.99 percent — only to lose their cars to repossession. None of them had any idea that the bank that brought them to court was founded by a billionaire candidate for president.
“I kinda thought we were getting robbed,” said Justin Casto, who works at an Oakdale meat company and received a 27.99 percent loan from the bank. “There’s no way I’m able to pay what they’re asking for, and my credit is so shot now it’s unreal.” [Emphasis added.]
Although Steyer and his wife claim are overhauling their bank’s practices, and that many of the 1800 lawsuits against borrowers are from older loans they acquired in 2016 due to buying Central Valley Bank, the Mercury News reports, Steyer’s bank “has continued to charge some borrowers who signed their loans before 2018 considerably higher rates, and taken them to court when they default.”
Steyer—who is one of several Democrats vying for the Democratic nomination for President—quit his role at Beneficial State Bank when he announced his bid for the presidency.
However, his wife still serves as Co-Founder and Co-CEO of the bank.