After a lengthy government career defined by his central role in bailing out predatory Wall Street banks as former President Barack Obama's Treasury Secretary, Timothy Geithner now heads a large financial institution that exploits the economic struggles of poor Americans for profit. As president of Warburg Pincus—a major New York private equity firm—Geithner helps manage a lucrative predatory lending outfit called Mariner Finance, which mass-mails loan checks to low-income Americans, hides exorbitant interest rates in the fine print, and quickly sues those who fail to repay the loan and interest in time, according to a detailed Washington Postreport.
"It's basically a way of monetizing poor people," John Lafferty, who worked as a manager trainee at a Mariner Finance branch in Nashville, told the Post. "Maybe at the beginning, people thought these loans could help people pay their electric bill. But it has become a cash cow."
Part of the burgeoning "consumer installment" industry—which consists of firms that offer slightly larger loans than payday lenders—Mariner Finance has hundreds of thousands of customers who, often in desperation, use the loans to cover soaring medical costs, home repairs, and other urgent expenses.
Given that in our "new gilded age" 40 percent of Americans can't afford a $400 emergency payment, the market for predatory lenders like Mariner Finance is vast and growing.
"This industry is a pipeline to transfer money from the poor to the ultra-rich," Ben Wikler, Washington director of MoveOn.org, wrote. "Obama's treasury secretary Tim Geithner is president of one of the private equity firms making a killing from it. Your economy, rigged to redistribute wealth to the top."