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PAYDAYPEONAGE:THIRTEENTHAMENDMENTIMPLICATIONSINPAYDAYLENDING

ByZoëElizabethLees*

ABSTRACT

During the recent economic downturn, payday lenders’ business andprofits have soared while traditional banks have tightened up their lendingpractices and experienced plummeting stock values. Payday lenders thrivein depressed economic climates. They do so by making short term, highinterest loans to the underclass, generally the poor in urban and immigrantcommunities who need money to meet basic needs and who are withoutthe sophistication to properly assess the risks of payday loans. Members of the underclass, therefore, are especially vulnerable to and ideal targets for

predatory practices and exploitive loans. As the underclass, almost by definition, do not have the resources to pay back payday loans, they must“rollover” the loans and must eventually owe exponentially more than theterms of their original loan. In effect, payday loans enrich lenders whileperpetuating the limited economic and social position of the underclass.

As a result, the payday lending industry must be regulated. Thisarticle argues that the Thirteenth Amendment of the United StatesConstitution–which formally ended slavery–is the proper vehicle forCongress to impose federal usury caps on payday loans. In order to makethis case, this Article provides an overview of payday lending practices;describes the underclass; discusses the Thirteenth Amendment, includingits ratification, judicial history, and modern development; and then appliesthe Thirteenth Amendment to payday lending and the underclass.

Much has been written on the subject of payday lending practices,notably Professor Nathalie Martin’s work on the predatory nature of payday lenders. Yet, the Thirteenth Amendment implications of payday lending have not been addressed and little has been done to address theconditions faced by the underclass. This paper makes clear that theThirteenth Amendment is triggered by payday lenders’ targeting of a

vulnerable social and economic people and that the Amendment providesan appropriate avenue for regulating this particular industry.

*J.D.Candidate,2013,UniversityofNewMexicoSchoolofLaw.IwouldliketothankProfessorNathalieMartinandProfessorDarwinderSidhu,yourmentorshiponthisarticlewasinvaluable.ThankyoutothestudentsofFall2011PredatoryLendingWritingSeminar,whosecommentsandeditswerecriticaltothispaper.IwouldliketothankProfessorFredHartwhohasbeenagoodteacherandfriend.Finally,thankyoutomyfamilyfortheirunwaveringsupport.

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I.INTRODUCTION

ClickonthePredatoryLendingAssociation(PLA)websiteandonecanview

itsmotto:“Helpingpaydaylendersextractmaximumprofitfromtheworking

poor.”1Thesitehelpsusersidentifytheworkingpoorandexplainshowthe“debt

trap”oftheworkingpoormaybeoptimized.2WhilethePLA’swebsiteparodiesthe

predatorynatureofpaydaylenders,thehumorisunfortunatelyrootedinthetruth.

Paydayloansare“small,short-term,triple-digitinterestrate”loansthatare

generallyrangefrom$200to$500dollars.3Theseloansgenerallyaresecuredby

theborrower’spost-datedcheckordebitauthorizationandareintendedsustainthe

borroweruntilpaydaywhentheywillpaybacktheloaninonelumpsumonreceipt

oftheirpaycheck.4AsofMarchof2010,“morethan19millionU.S.householdshad

takenoutpaydayloansworthmorethan$35billion.”5Apaydaylender’sbusiness

planistobuildabaseofcustomersthatborrowfrequentlyinordertokeepupwith

1http://www.predatorylendingassociation.com2Id.3NathalieMartin,1,000%Interest—GoodWhileSuppliesLast:AStudyofPayday

LoanPracticesandSolutions,52ARIZ.L.REV.563,564(2010).564.4Id .5Id .

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theirloanpayments.6Paydaylendersprofitfrompeoplewhocannotpaybacktheir

loans,andkeepborrowingtokeepupwiththeirpayments.7

TakeforexampleSandraHarriswhoborrowed$2,510inseparateloansfrom

apaydaylenderandendeduppaying$10,000infees.8Ms.Harrissaidthatwhileit

wasfastandeasytotakeouttheloan,noonetoldher“aboutthebadside…Because

theywantedyoutocomeback,that’showtheymadetheirmoney.”9Fiveyearsafter

Ms.Harrisfirstwenttoseeacreditcounselorshehadonlyone$300loantopayoff.

That$300loancosther$1,200ayearininterest.NotonlyisMs.Harristhetypeof

personthatthePLAfacetiouslyencouragesotherpaydaylenderstotarget–beingan

AfricanAmericanwomanwhoissufferingtougheconomictimes–sheistheexact

demographicthatpaydaylendersactuallytarget.Paydaylenders

disproportionatelytargetminorities10anddemographicsineconomicturmoil.11The

PLA’sparodydemonstrateswhatpaydaylendersarecovertlyandcoercivelydoing.

Inparodyingpaydaylender’spractices,thePLAexposesthepredatorybusiness

planofpaydaylenders.

Thepaydayloanindustrythrivesattheexpenseofmillionsofthe

underclass–generallydefinedasthosewhoareeconomicallyimpoverishedand

6Martin,supranote3,at577.7SeegenerallyMartin,supranote3,at573(explainingtheimportanceofrepeatcustomers).8http://www.cbsnews.com/stories/2005/05/16/60II/main695461.shtml.9Id.10MichaelASatz,HowThePaydayPredatorHidesAmongUs:ThePredatoryNature

ofthePaydayloanIndustryanditsuseofConsumerArbitrationtoFurther

DiscriminatoryLendingPractices,20TEMP.POL.&CIV.RTS.L.REV.123,138(2010).11http://online.wsj.com/article/SB10001424052970203658804576639431624988572.html?KEYWORDS=payday+lender(TheWallStreetJournalreportedinOctoberof2011,“Toughtimesaregoodtimesforpaydaylenders…”)

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withoutthemeanstoescapetheireconomiccondition–andminoritieswhoarehit

thehardestbythecurrentdepressedeconomicclimate.In2011,paydaylenders

stockssoaredtorecordhighsasstocksinlargebanksplummeted.12Theanemic

economicgrowthintheUnitedStatescoupledwithbanks’increasingunwillingness

tolendmoneyandlackofregulationsonpaydayloanshaveallowedtheindustryto

thrive.Theseloanstraptheborrowerandaredirectlyconnectedtotheborrower’s

paycheck.Thepracticeofpaydaylendinganditssuccessinkeepingthe

economicallydisadvantagedmiredinacycleofpovertyraiseseriousquestions

undertheThirteenthAmendment,whichformallybannedslaveryandwhichapplies

tomoderncircumstancessufficientlyresemblingslavery.Arepaydayborrowersthe

moderndaypeonwhoselaboristieddirectlytopayingoffadeceitfulandexcessive

loan?Dotheseloanstakeadvantageof,andpromoteresidualbadgesandincidents

ofslaverythattheThirteenthAmendmentsoughttoeliminateinsociety?

Inthispaper,IdiscusstheThirteenthAmendmentimplicationsfoundin

paydayloansandarguethattheThirteenthAmendmentisaproperfederalpath

throughwhichtoregulatepaydaylenders.SpecificallyinPartII,Idiscuss

ThirteenthAmendmenthistory,scholarship,andcourtinterpretationsofpeonage.

InPartIII,Ireviewpaydaylendingbyexaminingwhotypicallytakesoutthese

loans,whattheconditionsoftheloansgenerallyare,andevidenceastohowthese

loansaffecttheborrowers.Inthissection,Ialsodiscussthecoercivetechniques

usedbypaydaylenderstoropeborrowersintoabusiveloans.Finally,inPartIV,I

analyzehowconditionsofpaydayloanstriggerThirteenthAmendmentconcerns.I

12Id .

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arguethatbylookingatthestructureoftheloanitself,itsorganizationarounda

person’spaycheck,itsdirectrelationshipwithaperson’slabor,andthelender’s

coercivemeanstocompelaborrowertotakeoutadditionalloans,theThirteenth

Amendmentisimplicated.Thetargetedvictimsofpaydaylending,particularlythe

underclass–generallydefinedasthosewhoareeconomicallyimpoverished13–,are

properrecipientsofThirteenthAmendmentrelief,astheyaresufferingtheprecise

effectsofinvoluntaryservitudethattheThirteenthAmendmentwasdesignedto

eliminate.

Iunderstandthatmanywilldisagreewiththecomparisonofpayday

borrowerstoantebellumslaves.Idonotarguethattheseborrowersaresubjected

tothesameraciallyinfusedservitude,hate,violence,andabuse.However,Ido

arguethatthefreelaborconceptsthatdrovetheThirteenthAmendment’s

ratificationdoapply,andthatthetypeofcontractthatpaydaylendersrope

borrowersintoislikethatofthepeonagecontractsthatarealreadyacknowledged

tofallwithintheboundsoftheThirteenthAmendment’sprohibitions.Payday

debtors,becauseofthetypeofloanthatsuppressestheirfreelabor,sufferfromthe

badgesandincidentsofslaverythatthe39thCongress,whichenactedtheThirteenth

Amendment,andsubsequentSupremeCourtdecisions,soughttoeliminate.Today’s

underclasssuffersfromsocialandeconomicconditionsthatrestricttheirsocialand

physicalmobility,andthatrestricttheireconomicoptionsandlifedecisions.14These

areconditionstheThirteenthAmendmentaimedtoprevent.Whileinitiallypassed

13SeegenerallyDarwinderSSidhu,TheUrbanUnderclassasaConstitutionalConcern,unpublishedpage6(describingtheurbanunderclass).14Id .

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toendAfricanSlaveryinthiscounty,theThirteenthAmendmentisrelevanttoday,

astheconditionspoorpeoplefaceinthiscountrydonotenablethemtobe

meaningfullyfree.15[Beforecontinuing,youmaywanttonotewhat,ifanything,

previousscholarsorcommentatorshavesaidabouttherelationshipbetween

paydaylendingandtheThirteenthAmendment.Iftheyhavesaidanything,explain

whytheirthoughtsarenotadequateandwhyyourtakeaddssomethingtheydon’t.

Finally,alsoincludea“doomsday”statementaboutwhylaworsocietywillbeinbad

shapeifyourargumentsarenotconsideredandadopted.]

II.THIRTEETHAMENDMENTBACKGROUNDANDSCHOLARSHIP

Section1.Neitherslaverynorinvoluntaryservitude,exceptasapunishmentforcrime

whereofthepartyshallhavebeendulyconvicted,shallexistwithintheUnitedStates,oranyplacesubjecttotheirjurisdiction.Section2.Congressshallhavepowerto

enforcethisarticlebyappropriatelegislation.16

A.ThirteenthAmendmenthistoryandjudicialdevelopment

15SeegenerallyBruceA.Ackerman,BeyondCaroleneProducts,98HARV.L.REV.713,717(1985).Inhisarticle,AckermanarticulatestheneedforanewtestotherthanCarolene’sProductsFootnoten.4toprotectgroups’rightsintoday’spoliticalandsocialconditions,writing“…ifwefailtorethinkCarolene’sdictumaboutdiscreteandinsularminorities,wewillsucceedonlyindoingtwodifferentkindsofdamage.Onetheonehand,wewillfailtodojusticetotheveryracialandreligiousgroupsthatCarolenehasdonesomuchtoprotectinthepasthalf-century.Bytyingtheirrightstoanincreasinglyunrealisticmodelofpolitics,wewillplacethemontheweakestpossiblefoundation.Ontheotherhand,wewillfailtodojusticetoCarolene’sbasicinsightintotheproblemposedbyprejudiceinapluralist

democracy.Theendofpoliticsofexclusionhardlyimpliesthatpluralistdemocracynowfunctionsfairly;itdoesmean,however,thatthegroupsmostdisadvantagedbypluralisminthefuturewillbedifferentfromthoseexcludedundertheoldregime.Thevictimsofsexualdiscriminationorpoverty,ratherthanracialorreligiousminorities,willincreasinglyconstitutethegroupswiththegreatestclaimunderCarolene’sconcernwiththefairnessofpluralistprocess.”16USCACONSTAmend,XIII

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Enactedin1865,theThirteenthAmendmentprohibitedtheinstitutionof

chattelslaveryintheUnitedStates.TheframersoftheAmendmentdidnotutilize

specificlanguagenarrowingitsscopetoAfrican-Americanex-slaves.17

Consequently,theAmendmentprotects“anyoneregardlessofraceortheir

relationshiptonineteenth-centuryslavery;theremnantsofslaveryasencountered

byanyoneregardlessofraceortheirrelationshiptonineteenth-centuryslavery;or

anydiscrimination,humiliation,orsubjugationastoanyone.”18AstheSupreme

Courtheld,“[w]hiletheimmediateconcern[oftheAmendment]waswithAfrican

slavery,theAmendmentwasnotlimitedtothat…”19,itwasa“charterofuniversal

civilfreedomforallpersons,ofwhateverrace,color,orestate,undertheflag.”20

Inadditiontothetext,theintentofCongresswastoexpandtheAmendment

tonon-blacks.In1865Congresswascommittedtoriddingthecountryofslavery

andtopromotingfreelaborinwhichallpeoplewereentitledtoenjoythefruitsof

theirownlabor.21Thiscommitmentencompassedblacksandwhites,asCongress

recognizedthatSouthernslaveryhaddecreasedworkers’wagesandhad

17Sidhu,supranote14,at4.18Sidhu,supranote14,at4.19Slaughter-HouseCases,83U.S.at90.20Baileyv.StateofAlabama,219U.S.219,241,31S.Ct.145,151.SeealsoMargaretHoward’sargumentthatBaileyandClyattv.US “clearlydisconnect[ed]theThirteenthAmendmentfromitsracialroots,atleastasfaraspeonageisconcerned.”BankruptcyBondage,2009U.ILL.L.REV.191,208.21Bahar,Azmy,UnshacklingtheThirteenthAmendment:ModernSlaveryanda

ReconstructedCivilRightsAgenda,71FordhamL.Rev.981,1009(2002).

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stigmatizedagriculturalandhardlabor.22SenatorH.Wilson,addressingCongress

duringtheThirteenthAmendmentdebates,stated

…[t]hisgiganticcrimeagainstthepeace,theunity,andthelifeofthe

nationistomakeeternalthehatefuldominionofmanoverthesoulsandbodiesofhisfellowmen.Thosesacrificesofproperty,ofhealth,andoflife,theseappallingsorrowsandagoniesnowuponus,areallthemerciless inflictionsofslavery… Yes, slavery is the conspiratorthatconceivedandorganizedthismightyconspiracyagainsttheunityandexistenceoftheRepublic…23

22WilliamM.Carter,Jr.,Race,Rights,andtheThirteenthAmendment:Definingthe

BadgesandIncidentsofSlavery ,40U.C.DAVISL.REV.1311,1357.Representative

IngersollofIllinoisstatedasareasonforsupportingtheAmendment“…forthesakeofthesevenmillionsofpoorwhitepeoplewholiveintheslaveStatesbutwhohaveeverbeendeprivedoftheblessingsofmanhoodbyreasonofthistrice-accursedinstitutionofslavery.Slaveryhaskepttheminignorance,inpoverty,andindegradation.”Cong.Globe,38thCong.,1st Sess.2990(1864).SenatorWilsonfurtherstated,“Thenthewrongedvictimoftheslavesystem,thepoorwhiteman,thesand-hiller,theclay-eaterofthewastedfieldsofCaroline,impoverished,debased,dishonoredbythesystemthatmakestoilabadgeofdisgrace,andtheinstructionofthebrainandsoulofmanacrime,willlifehisabashedforeheadtotheskiesandbegintoruntoruntheraceofimprovement,progressandelevation.”Cong.Globe,38thCong.,1st Sess.1324(1864)(StatementofSen.H.Wilson)23Cong.Globe,38thCong.,1st Sess.1320(1864)(StatementofSen.H.Wilson).SenatorWilsonconcludedhisaddresstoCongressstating:“Ourcountryisnowfloatingonthestormywavesofcivilwar.Darknesslowersandtempeststhreaten.Thewavesarerisingandfoamingandbreakingaroundusandoveruswithengulfingfury.Butamidthethickgloom,thestarofdutycastsitsclearradianceoverthedarkandtroubledwaters,makingluminousourpathway.Thatdutyis,witheveryconceptionofthebrain,everythroboftheheart,everyaspirationofthesoul,bythought,bywork,andbydeedtofeel,tothink,tospeak,toactsoastoobliteratethelastvestigesofslaveryinAmerica,subjugaterebelslavemasterstotheauthorityofthenation,holdupthewearyarmofourstrugglingGovernment,crowdwithheroicmanhoodtheranksofourarmiesthatarebearingthedestiniesof

thecountryonthepointsoftheirglitteringbayonets,andthusforeverblastthelasthopeoftherebelchiefs…Thenshallthewaningstaroftherebelliongodownineternalnight,andthestarofpeaceshallascendtheheavens,castingitsmildradianceoverfieldsnowdarkenedbythestormsofthisfratricidalwar…ThenthestarofUnitedAmerica,nowobscured,willreappear,radiantwithsplendorontheforeheadoftheskies,toillumethepathwayandgladdentheheartofstrugglinghumanity.”1324.

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SenatorWilsonpronouncedthatslaverywastheonly“foeourcountryhasonthe

globe…”andthat“everywordspoken,everylinewritten,everyactperformed,that

keepsthebreathoflifeinslaveryforamoment,isagainsttheexistenceof

democraticinstitutions,againstthedignityofthetoilingmillions,againstliberty,the

peace,thehonor,therenown,andthelifeofthenation.”24

Accordingly,theThirteenthAmendment–passedtoendimmoral,racial

slavery–wasalsopassedwithabroaderview:thatoneshouldownhisownlabor

andbefree.Thus,itspassageprohibited“allrepressiveconductrationallyrelated

totheimpedimentsoffreedom,notsimplyracistlaborpractices.”25WhenSenator

WilsonandRepresentativeIngersolladdressedtothe39thCongressthatthe“poor

whiteman”wasalsoavictimofslavery,theyrecognizedthatpoorpeople,

regardlessoftheirrace,sufferedtheeffectsofslavery-notjustAfricanAmericans.

ThedebatesgiveusinsightintothisbroaderscopeoftheThirteenthAmendment’s

vision.Whilethe39thCongresshadyettorecognizethatothersinthecountrywere

sufferingfrombadgesandincidentsofslavery–namelyNativeAmericans26–the

visionoftheThirteenthAmendmentwastopreventtheinvoluntaryservitudeofall

inthecountry,towhomeverwassufferingfromitsconditions.27

B.Peonage-theWorkContractsthatBroketheDebtor’sBank.

24Id.25AlexanderTsesis,FurtheringAmericanFreedom:CivilRightsandtheThirteenth

Amendment ,45BCLR307,389.26RodneyM.Baine,NotesandDocuments,IndianSlaveryinColonialGeorgia,79TheGeorgiaHist.Quarterly,418,418(1995)(writingonIndianslaverythathaslargelybeenignoredbyhistorians).27SlaughterHouseCases,83U.S.36,70-71.

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Subsequentstatutes,stemmingfromtheThirteenthAmendment,made

peonageunconstitutional.28PriortotheenactmentoftheThirteenthAmendment

andthesestatutes,peonagewasthesubjectofaseminalNewMexicocase, Jaremillo

v.JosedelaCruzRomero.29Thecaseconcerned,MarianaJaremillo,aservantwhose

fathertookherawayfromtheserviceofhermasterwhileshestillowed$51.75that

hermasteradvancedtoher.30Marianadidnotappearattrial,andwasrendereda

judgmentfor26monthsofwork,orfortheamountsheowed,interestandall

costs.31ThedistrictcourtheldthatMarianaowedheremployer,JosedelaCruz

Romero,thesecuritiesonherappealbond,thesumof$56.21,andthecostsofthe

suittobetaxed.32Furthermore,indefaultofthepaymentthatsheowed,shehadto

servehermasterasapeonuntildebtwaspaid.33

UltimatelytheSupremeCourtoftheTerritoryofNewMexicoreversedthe

judgmentofthelowercourtwithcoststoRomeroforalackofevidenceofdebt

owed.34Thecourtdefined“peon”and“peonage”aspeopleindebtedtotheir

28U.S.C.A.Const.Amend.XIII.SlaveryAbolished;Enforcement.Seealso42U.S.C.A.§1994.“TheholdingofanypersontoserviceorlaborunderthesystemknownaspeonageisabolishedandforeverprohibitedinanyTerritoryorStateoftheUnitedStates;andallacts,laws,resolutions,orders,regulations,orusagesofanyTerritoryorState,whichhaveheretoforeestablished,maintained,orenforced,orbyvirtueofwhichanyattemptshallhereafterbemadetoestablish,maintain,orenforce,directlyorindirectly,thevoluntaryorinvoluntaryserviceorlaborofanypersonsaspeons,inliquidationofanydebtorobligation,orotherwise,aredeclarednulland

void.”Seealso18U.S.C.A.Pt.I,Ch.77.Peonage,Slavery,andTraffickinginPersons.291N.M.190,1Gild.190(N.M.Terr.1857).30Id .at1.31Id .32Id .33Id .34Id.at9.

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masters.35“Thiswasthecordbywhichtheyseemedboundtotheirmasters’

service...Uponenteringthenewservice,orwhilecontinuingtherein,thepeonwas

heldrigorouslytofulfillhispledgeandrenderhislaborsolongashisdebts

remained,oranadditionalonewasincurred.”36Thecharacteristicthatseparated

peonagefromslaverywasthat“[c]onsentofthepartieswasinvariablythe

foundationuponwhichaservantbecameboundtoservice.”37Peonscouldleave

theirservicebypayingbackthedebttothemaster,ortoworkitoff.38Apersonin

theconditionofpeonagelost

[n]oneofhisrightsasacitizenbycontractingwithamastertoservehim. He[was]undernopolitical disqualifications; he [voted] atallelectionsifotherwiselegallyqualified;hisservitude[did]notrenderhim under our laws ineligible to the offices of the precinct, thecountry,thelegislatureordelegateincongress.39

In1911,theUnitedStatesSupremeCourtopinedontheunconstitutionality

ofpeonageundertheThirteenthAmendmentinBaileyv.StateofAlabama.40There,

BaileywasconvictedunderanAlabamastatuteofobtaininga$15debtundera

writtencontractwithintenttoinjureordefraudhisemployer–intentnottopay

backtheloantohisemployer.41Baileyhadborrowed$15,whichwouldtakeayear

toworkoff.42TheCourtfoundthatalthoughinthesystemofpeonagethedebtor

contractedtoperformthelabor,thisdidnotlegalizetheattemptedenforcementof

35Id.at2.36Id.37Id .at3.38Id .at739Id .at840219U.S.219,31S.Ct.145.(1911)41Id .at228,31S.Ct.at147.42Id.

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thecontractbythestate.43Infact,theCourtheld,thecontractwasunconstitutional

undertheThirteenthAmendment 44anditmatterednotundertheThirteenth

Amendmentwhetherthedebtorvoluntarilyorinvoluntarilyenteredintoapeonage

loan.TheBailey Courtfoundthat,whetherenteredintovoluntarilyorinvoluntarily,

theclassificationoftheloan

“implies simply a difference in the mode of origin, but none in thecharacter of the servitude. The one exists where the debtorvoluntarilycontractstoentertheserviceofhiscreditor.Theotherisforced upon the debtor by some provision of law. But peonagehowevercreatediscompulsoryservice,involuntaryservice.”45

Itwasn’ttheemploymentcontractthatwasfoundunconstitutional,ratherthetype

ofcontractpreventingapersonfromenjoyingthefruitsoftheirlabor46–acoercive

contract.Thecontractwastiedtothedebtor’slabor,thiswasunconstitutional;the

employer-employeerelationshipwasnotatissue.

JusticeField’sdissentintheSlaughter-HouseCasesfurthersynthesizedthe

righttocontrolone’slabortotheThirteenthAmendment.JusticeFieldwrotethat

peonageandanyotherformof“compulsoryserviceforthemerebenefitorpleaser

43Id .at242and15244Id .at245,S.Ct.at15345Id .at242.(Emphasisadded).46JOHNLOCKE,THESECONDTREATISEOFGOVERNMENTANDALETTERCONCERNINGTOLERATION12(DroverThrifted.,CourierDoverPublications,2002)(1690).LockewasinstrumentalintheFramer’sconstructionofthisconcept.Lockewrote,“Thoughtheearthandallinferiorcreaturesbecommontoallmen,yeteverymanhasapropertyinhisownperson;thisnobodyhasanyrighttobuthimself.The

labourofhifbodyandtheworkofhishandswemaysayareproperlyhis.”OnSlaveryLockewrote,“Thefreedomfromabsolute,arbitrarypowerissonecessaryto,andcloselyjoinedwith,aman’spreservation,thathecannotpartwithitbutbywhatforfeitshispreservationandlifetogether.Foramannothavingtheoewrofhisownlifecannotbycompact,orhisownconsent,enslavehimselftoanyone,norputhimselfundertheabsolute,arbitrarypowerofanothertotakeawayhislifewhenhepleases…”Id .at11.

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ofothers…”weretobepreventedbytheThirteenthAmendment.47JusticeField

wrotethatinvoluntaryservitudemanifesteditselfintotheeffectsofthetypeone’s

labor,stating

[theThirteenthAmendment]wasintendedtomakeeveryoneborninthiscountryafreeman,andassuchtogivetohimtherighttopursuethe ordinaryavocations of lifewithout otherrestraint than such asaffectsallothers,andtoenjoyequallywiththemthefruitsofhislabor .Aprohibitiontohimtopursuecertaincallings,opentoothersofthesameage,condition,andsex,ortoresideinplaceswhereothersarepermittedtolive,wouldsofardeprivehimoftherightsofafreeman,andwouldplacehim,asrespectsothers,inaconditionofservitude.48

Furthermore,JusticeFieldpronouncedthatanycompulsionthatwouldforceone

intolaborevenforhisbenefit“onlyinonedirectionorinoneplace”wouldbenearly

asoppressiveasthe“compulsionthatwouldforcehimtolaborforthebenefitor

pleasureofanother,andwouldequallyconstituteanelementofservitude.”49

FollowingJusticeField’slineofreasoning,itmattersnowhysomeoneentersinto

theoppressivecontract,butthatoneisforcedbythesocialconditionsinto

involuntaryservitude.

TheSupremeCourtalsowroteaboutthecyclicaldebtthatisinherentin

peonage.InUSv.Reynolds,G.W.Broughtonactedassuretyfortwoconvictsby

payingtheircourtfinesandcontractingthemtoworktopayoffthedebt.50Oneof

theconvictshadbeenchargedwithviolatingalaborcontracttoworkoffdebtto

anothercreditor.51TheCourtfoundthatthelaborcontractscreatedbysuretywere

47SlaughterHouseCases,83U.S.36,90.48Id .49Id .at90-9150235U.S.133,140,35S.Ct.86,87(1942).51Id .

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harsherthanthelaborrequirementsofthestatetorepaythefines.52Whilethe

convictsweretechnicallybeingpunishedfortheircrimeasallowedbytheexpress

termsoftheThirteenthAmendment 53,thetermsoftheirlaborcontractwerenot

fixedbythestate.54Theconvictswereworkingunderconstantcoercionandthreat

ofarrest,thusthesystemwasfoundtobeinviolationoftheThirteenth

Amendment.55TheCourtwrote,“[t]heconvictisthuskeptchainedtoanever-

turningwheelofservitudetodischargetheobligationwhichheasincurredtohis

surety,whohasenteredintoanundertakingwiththestate,orpaidmoneyinhis

behalf.”56

TheU.S.CourtofAppealsfortheNinthCircuitinTheUnitedStatesv.Mussry

suggestedthatduetomoderneconomicrealities,theslavesthatweretheoriginal

concernoftheThirteenthAmendmentaretoday’smigrantworkersanddomestic

servants,andthatthemethodsofcoercionhavebecomemoresubtleyetequally

effective.57Accordingly,thecourtheldthatpsychologicalcoercionofworkersisa

formofthreataddressableundertheThirteenthAmendment.Morespecifically,in

Mussry ,thedefendantsledtheirIndonesianservantstobelievetheyhadtoworkto

52Id.at147,35S.Ctat89.53Neitherslaverynorinvoluntaryservitude,exceptasapunishmentforcrime

whereofthepartyshallhavebeendulyconvicted ,shallexistwithintheUnitedStates,oranyplacesubjecttotheirjurisdiction.USCACONSTAmend.XIII-FullText

(emphasisadded).54Id .55Id.at146-147,35S.Ctat89.56Id .57U.S.v.Mussry ,726F.2d1448,1451(9thCir.1984)abrogatedby U.S.v.Kozminski,487U.S.931,108S.Ct.2751,101L.Ed.2d788,46Empl.Prac.Dec.P38067,56USLW4910,1988WL64998(1988)

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repaythedefendantsformoneyspentontheirtraveltotheUnitedStates.58The

defendantstookadvantageofthefactthattheirIndonesianservantswere“…ina

strangecountrywheretheyhadnofriends,andhadnowheretogo,didnotspeak

English,hadnoworkpermit,socialsecuritycard,oridentification,nopassportor

returnairlineticket…nomeansbywhichtoseekotheremployment,andwith

insufficientfundstobreaktheircontracts…”59Therethecourtheldthat

[c]onductotherthantheuse,orthreateneduse,oflaworphysicalforcemay,undersomecircumstances,havethesameeffectasthemoretraditionalformsofcoercion-ormayevenbemorecoercive;suchconduct,therefore,mayviolatethe13thamendmentanditsenforcingstatutes.Thecrucial

factoriswhetherapersonintendstoanddoescoerceanindividualintohisservicebysubjugatingthewilloftheotherperson.Aholdingininvoluntaryservitudeoccurswhenanindividualcoercesanotherintohisservicebyimproperorwrongfulconductthatisintendedtocause,anddoescause,theotherpersontobelievethatheorshehasnoalternativebuttoperformthelabor…60

TheMussrytestthereforefindssufficientashowingofpsychologicalcoercionto

proveinvoluntaryservitude,evenintheabsenceofphysicalorthreateningforce.61

Theearlycasesaddressingpeonage,whethervoluntaryorinvoluntary,all

haveacommondenominator:laborcontractrestrictedanindividual’sfreeexercise

oflaborandeconomicindependence.62ProfessorBaherAzmywroteofthepeonage

casesdiscussedabove,contending“[t]hatthecasesneverthelessadvanceda

58Id .59Id .at1453.60Id .“Indeterminingthequestionofinvoluntariness,thecourtshouldconsider

whetherthechallengedconductwouldhavehadtheclaimedeffectuponareasonablepersonofthesamegeneralbackgroundandexperience.Thus,theparticularindividual'sbackgroundisrelevantindecidingwhetherheorshewascoercedintolaboringforthedefendant.”61JamesHenryHaag,InvoluntaryServitude:AnEighteenth-CenturyConceptinSearchofaTwentieth-CenturyDefinition,19PAC.L.J.873(1987-88),892.62Azmy,supranote21,at986.

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centralconcernoftheThirteenthAmendmentframers:protectingthemobilityof

laborandmeaningfulopportunitiesforeconomicindependence.”63InProfessor

Azmy’sanalysisofBaileyv.StateofAlabamahewrote

“...theCourtwasadvancingacentralRepublicaninsistencethatmenbe able to enjoy the ‘fruits of their own labor.’ This distinctivelibertarianvision required that labor bemobile, and untethered toabsolutecontrolofanotherprivatepersonand thatmenmusthavetherighttocontrolbasiclifechoices,includingwhenandforwhomthey work. In such a free system, Republicans believed that mencould partake in the continuing, natural process of progressingtowardeconomicindependenceandsocialimprovement.”64

ModerndayThirteenthAmendmentscholarshipcallsforprotectionforall

peoplefromarbitraryrestraintsoffreedom.65Freedomoflaboraside,Thirteenth

AmendmentexpertProfessorAlexanderTsesisarguesthattheThirteenth

Amendmentshouldprotectfreepeople’s“conceptionsof,andquestsfor,

qualitativelygoodlives.”66Underthisstandard,peonagesuppresses“life

aspirations[by]prohibiting[debtors]fromenteringintomaritalcontracts,from

choosingprofessions,andfrommakingahostofotherimportantlifedecisions.”67In

hiscallformodernThirteenthAmendmentlitigationandlegislation,Professor

Tsesiswrites“[p]rotectingessentialfreedomsmeansendingcoercivepracticesand

enabl[ing]peopletomakereasonablechoices.UsingtheThirteenthAmendmentfor

63Id .at986.64Id .at1031.65Tsesis,supranote25.66Id .at389.67Id .

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thatendwouldbealegitimateuseofgovernmentalpowertoprovideforthe

commongood.”68

C.TheBadgesofSlaveryApplyevenwithoutSlavery.

Thestateofpeonagewasconsideredasymptomofslavery,butcertainly

wasn’ttheonlysymptom.InBailey theCourtstatedthattheplainintentionofthe

ThirteenthAmendmentwasto

[a]bolish slaveryofwhatever nameand formand all itsbadgesandincidents; torender impossibleany stateofbondage;tomake labor

free,byprohibitingthatcontrolbywhichthepersonalserviceofoneman is disposed of or coerced for another’s benefit, which is theessenceofinvoluntaryservitude.69

TheBailey courtthusrecognizedthatthesymptomsofslaverystillexisted,andthat

thesesymptoms,calledthe“badgesandincidents”ofslavery,werethemselves

unconstitutionalundertheThirteenthAmendment.70

TheSupremeCourtin Jonesv.AlfredHMayerCo.elaboratedonthe

relationshipbetweenbadgesandincidentsofslaveryandtheThirteenth

Amendment:

Itmaybethatbytheblackcode…inthetimeswhenslaveryprevailed,the proprietors of inns and public conveyances were forbidden toreceivepersonsoftheAfricanrace,becauseit…wasmerelyameansofpreventing…escapes,andwasnopartoftheservitudeitself…The long existence of African slavery in this country gave us verydistinctnotionsofwhatitwas,andwhatwereitsnecessaryincidents.

Compulsoryserviceoftheslaveforthebenefitofthemaster,restraint68Id.at369.69Bailey ,at241,S.Ct.at151.Emphasisadded.70Id .(“[L]egislationmaybenecessaryandpropertomeetallthevariouscasesandcircumstancestobeaffectedbyit,andtoprescribepropermodesofredressforitsviolationinletterorspirit.”).

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of his movements except by the master's will, disability to holdproperty, to make contracts, to have a standing in court, to be awitness against a white person, and such like burdens andincapacitiesweretheinseparableincidentsoftheinstitution.Severerpunishments for crimes were imposed on the slave than on free

personsguiltyofthesameoffenses.71

TheCourtin Jonesexpandedonthisconcept,reversingadistrictcourt’s

dismissalofacomplaintbroughtbyplaintiffswhowerenotallowedtobuyahome

becauseoftheirrace.72TheCourtexplainedthatjustastheBlackCodesenacted

aftertheCivilWarhadrestrictedthefreeenjoymentofrights,sodidtheexclusionof

Negroesfromwhitecommunities.73TheCourtcontinues,“[w]henracial

discriminationherdsmenintoghettosandmakestheirabilitytobuypropertyturn

onthecoloroftheirskin,thenittooisarelicofslavery.”74

Since Jones,theCourthasindicatedthatitisCongress’responsibilityto

interpretandgivemeaningtothe“badgesandincidents”ofslavery.TheCourtalso

hasacknowledgedthattheAmendment’sreachismuchbroaderthanthatforother

ReconstructionAmendments,theFourteenthandFifteenthAmendments.75

Accordingly,theSupremeCourthasneverruledthattheThirteenthAmendmentis

limitedonlytotheconditionsofliteralslavery.76Rather,actualslavery,aswellas

71Civ.RightsCases,109U.S.3,21-22,3S.Ct.18,29,27L.Ed.835(1883)72 Jonesv.AlfredHMayerCo.,392U.S.409,412,88S.Ct.2186,2188(1968).73Id .at442,88S.Ct.at2205.74Id .at443,88S.Ct.at2205.75Carter,supranote22,at1327.76Carter,supranote22,at1327.

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the“badgesandincidents”ofslavery,orthelegaciesofslavery,arebothprohibited

bytheThirteenthAmendment.77

Thequestionbecomes,whatmayreasonablyconstitutea“badgeorincident”

ofslavery?ProfessorDonaldP.Judgesarguesthattoday’sunderclassexperience

badgesandincidentsofslaveryintheirimpoverishedeconomicandrelatedsocial

conditions,regardlessofrace:“joblessness,crime,welfaredependency,drug

addiction,inadequatehealthcareandbrokenfamilies…”78Conditionsthatare

severeenoughtoformacastesocietythusareconsideredbadgesandincidentsof

slavery79,especiallywhentheypromoteacycleofpoverty,renderingtheunderclass

“chronicallydisadvantaged.”80Morespecifically,theseconditionsaremanifested

through“denialoffreedomofmovement,abilitytoownordisposeofproperty,the

righttomakeandenforcecontracts…”81Furthermore,scholarshavepositedthat

“humantrafficking,hatespeech,childabuse,violenceagainstwomen,abortion,the

citizenshipofchildrenofimmigrants,theautonomyofAmericanworkers,andU.S.

corporations’useofexploitedforeignlaborers”areallencompassedbythe

ThirteenthAmendment’sprohibitionofincidentsofinvoluntaryservitude.82

EconomicindependenceisapriorityoftheThirteenthAmendment’sgoalto

eliminatethebadgesandincidentsofslavery,andisanessentialpredicateforan

77Id .At1365.78DouglasP.Judges,BayonetsfortheWounded:ConstitutionalParadigmsand

DisadvantagedNeighborhoods,19HASTINGSCONST.L.Q599,682.79Id .80Id .at688.81Carter,supranote22,at1329.82Sidhu,supranote14,at4.

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inclusive,freedemocraticsociety.83“Economicindependenceisnecessaryifthe

citizenistobeabletodeliberateonthecommongood,therespublica,thething

public.”84ThefreedomsaffordedundertheThirteenthAmendmentarethreatened

whencitizenshavefailedtobesetfreefromeconomicdependence.85Professor

AkhilAmararguesthattheThirteenthAmendmentshouldbeinterpretedto

“guaranteeeachAmericanacertainminimumstakeinsociety.”86Thiswillhelp

createindependentcitizensthathaveeconomicopportunity,avoiceinthepolitical

arena,andthatarenotsociallyisolated-acentralgoaloftheThirteenth

Amendment.87Insuranceofminimalentitlementsareaconstitutionalduty,

ProfessorAmarposits,andthenationneedsminimumbirthrightsforevery

individual.88Ifyouviewtheminimumstakeinsocietyasafloorforminimumrights

enjoyedbyeveryindividualinthiscountry,thosebelowthefloorwillsufferfrom

economic,political,and/orsocialisolationthatleavesthemvulnerabletosuffering

thebadgesandincidentsofslavery.89

III.CONDITIONSOFTAKINGOUTAPAYDAYLOAN

83AkhilReedAmar,FortyAcresandaMule:ARepublicanTheoryofMinimal

Entitlements,13HARV.J.L.&PUB.POL’Y37,38(1990).84Amar,supranote83.85Amar,supranote83,at40.86Amar,supranote83,at40.87Amar,supranote83,at40.88Amar,supranote83,at43.89Seegenerally Sidhu,supranote14,at7(stating,“TheThirteenthAmendment…supportsthefederalgovernment’sestablishmentofafloorofeconomicandeducationalconditionssuchthattheurbanunderclassmaypossessmeaningfulhorizontalandverticalliberty…tobeminimallydefectivemembersofsociety.

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Astheunderclass90isthepaydaylender’smostprofitablecustomerbase,

paydaylendersmarketdirectlytomembersoftheunderclasseveniftheloansare

unaffordable.91Moreaffluent,sophisticatedconsumersarelesslikelytomake

mistakeswhenshoppingforloans,eitherbecausetheyarebettereducatedabout

financialproductsortheycanhireexpertstohelpthem;and,totheextentthatthey

domakeamistake,theycanaffordtorecover.92Bycontrast,paydaylendersdesign

productsthatexploitpoorerconsumers’mistakes.93Lendersadvertisethatpayday

loansareafastandeasywaytogetaloan,especiallyforthosewith“bad”credit.94

Theindustryadvertisesviaradio,television,Internetandmail.95Moreoverpayday

lenderswillenticedebtorstotakeloansbyofferingpromotionalfreepaydayloans

tofirsttimeborrowers,andreferralfeestoexistingcustomersforreferringnew

ones.96Theunderclass“lack[s]thefinancialcushionthatrichconsumershave,and

thereforetheyaremorevulnerabletotheunexpectedcostsofcreditproductsand

morelikelytostumbleintofinancialdistress.”97

90TheunderclassexemplifiestheThirteenthAmendmentproblemwithpaydaylending,butThirteenthAmendmentreliefmaynotnecessarilybelimitedtotheunderclass.91SeegenerallySatz,supranote10,at 125.SeealsoShaneM.Mendenhall,PaydayLoans:TheEffectsofPredatoryLendingonSocietyandtheneedformorestateand

FederalRegulation,32Okla.CityU.L.Rev.299(2007),307.92OrenBar-GillandElizabethWarren,MakingCreditSafer ,157U.Pa.L.Rev.1,64.93Bar-GillandWarren,supranote92,at64.94ShaneM.Mendenhall,PaydayLoans:TheEffectsofPredatoryLendingonSocietyandtheneedformorestateandFederalRegulation,32Okla.CityU.L.Rev.299(2007),306.95Mendenhall,supranote94.96Martin,supranote3,at574.97Bar-GillandWarren,supranote92,at64.

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Furthermore,paydaylendersdisproportionatelytargetminorities98

especiallyAfricanAmericansandHispanics,99alongwithmilitarymembersand

women.100Paydaylenderstargetminoritycommunitiesbysettingupshopinpoor

minorityneighborhoods.101Theydevelopbusinessplanstopromotethetargeting

ofminoritiesandwelfarerecipients.102Paydayloansare“designedtoextendcredit

toborrowerswhoaredeniedaccesstotraditionalcreditproducts…thebroad

exposureofminoritiestopaydayloansandsubprimemortgagesimpliesabroad

exposuretotherisksassociatedwiththeseproducts.”103

Infurthertakingadvantageoftheborrower,paydaylendersarefullyaware

that“manylower-incomepeopleareintimidatedbybanks.”104Usingthistotheir

benefit,friendlypaydaylendersmakecustomersfeelathomeandacceptedsothat

theyfeelcomfortabletakingoutinitialloansandthenreturningtoborrowmore.105

Thesepracticessuggestthatlendersarewolvesinsheep’sclothing.Whenthe

debtor’sloanrollsover,theborrowertypicallywillenduppaying$1800fora$300

loan.106Lendersknowtheborrowerswillpayanyinterestrateforfearofnot

makingotherbasicpayments,suchasforfood,electricity,oracar.107

98Satz,supranote10,at138.99Satz,supranote10,at137.100Bar-GillandWarren,supranote92,at68.101Satz,supranote10,at138.102Satz,supranote10,at138.103Bar-GillandWarren,supranote92,at68.104Martin,supranote3,at 576.105Martin,supranote3,at567.106Satz,supranote10,at132.107SeeMendenhall,supranote94,at307(“Theassumptionisthatpeoplewithfinancialdifficultiesindireneedofmoneywillpayalmostanyinterestratetogetit.”).

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Paydaylenderscharacterizeapaydayloanasashort-termloan,yettheloan

isdesignedasinterest-onlyloansothe“principalessentiallystaysoutforever,while

thelenderrecoupsthemoneyhehasloanedinonlyfourweeks.”108This

distinguishespaydayloansfromothertypesofloans,suchascreditcardloansor

homemortgages,whicharedesignedtopayofftheprincipalandtheinterestin

installments.109Thetypicalpaydaydebtorfindsitimpossibletorepaytheprincipal

balancebytheendoftheloanperiod.110Thisleadstoa“Rollover”-whichoccurs

“whenacustomer,unabletorepaythefullprincipalandunwillingtofallintodefault

ifthepaydaylenderattemptstocashhercheck,rollsthepaydayloanoverfor

anotherpaycycle…”111Rolloversarethe“breadandbutter”ofthepaydaylending

business.112

Paydayloansaredirectlyrelatedtoaborrower’sincome.113Whileacredit

reportisnotrequiredtotakeoutapaydayloan,114thelendersdowhatevertheycan

108Martin,supranote3,at 564.109ChristopherL.Peterson,UsuryLaw,PaydayLoans,andStatutorySleightofHand:SalienceDistortioninAmericanCreditPricingLimits,98MINN.L.REV.4(Apr.2008)1158(“…whilefocusingonadollaramountmightsimplifycomparisonofonepaydayloantoanotherpaydayloan,itconfusesthemoreimportantpricecomparisontoothertypesofdebtsuchascreditcards,pawnshoploans,homemortgages,andpersonalloansfromfinancecompanies,banks,orcreditunions.”TalkingaboutcharacterizingtheAPRofapaydayloanasfeesmisleadstheborrowerintothinkingitisjustasgood,ifnotbetterthanothertypesofloans.)SeealsoPaydaylenders:Smallloans,heftyfees,bigproblem,Consumerreports.org,available

athttp://www.consumerreports.org/cro/aboutus/mission/viewpoint/small-loan-big-problems/overview/small-loan-big-trouble-ov.htm.110Satz,supranote10,at 129.111Satzsupranote10,at130.112Martin,supranote3,at575.113Seegenerally Mendenhall,supranote94,at305(explainingthatlendersknowborrowersdonothavesufficientfundsintheirbankaccountsatthetimetheloanis

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tomakesuretheyreceivepayments.115Theborrowerisrequiredto“enterintoa

bankdebitagreementthatenablesthelendertodebittherolloverfeefromherbank

accounteverytwoweeks.”116Moreover,itisbecomingincreasinglypopulartohave

aborrowerauthorizeheremployertopayalenderdirectlyfromherwages.117

Thesewageassignmentsensurethatthepaydaylenderwillreceiveitspayment

beforetheborrowerisabletopayotherbills,creatingadependenceonthepayday

lendertoprovidemoreloans,118proliferatingtheborrower’scycleofdebt.

Thereisagreatdealofdirectandindirectcoercioninpaydaylending.

Discussingexamplesofsuchcoercion,andevenoutrightfraud,inpredatorylending,

ProfessorKathleenC.EngelandProfessorPatriciaA.McCoywrite,“Lendingfraud

comesinendlessvarietiesandisonlylimitedbytheingenuityoftheperpetrators…

Thefirsttypeoffraudconsistsofdeceptionaimedatborrowers.”119Themost

notoriousdeceptionsincludefraudulentdisclosures,failurestodiscloseinformation

asrequiredbylaw,bait-and-switchtactics,andloansmadeincollusionwithhome-

repairscams…”120

Coercionexistswiththemethodsbywhichpaydaylenderscharacterizethe

annualpercentagerate(APR).TheAPRisadvertisedtotheborrowerasafeefor

granted,thereforeagreetowaituntiltheborrowerreceivestheirpaychecktoobtainpayment).114Satz,supranote10,at128.115Seegenerally Mendenhall,supranote94,at314(explainingthefrequentlyunfair

andillegalcollectionpracticesofthepaydaylendingindustry).116Satz,supranote10,at132.117Satz,supranote10,at132.118Satz,supranote10,at132.119KathleenC.Engel&PatriciaA.McCoy, ATaleofThreeMarkets:TheLawandEconomicsofPredatoryLending,80Tex.L.Rev.1255,1267(2002).120EngleandMcCoy,supranote119.

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procuringthepaydayloan,generallyrangingfrom$15-$50.121These“fees”are

essentiallyafinancecharge,butexpressedasanAPR,thus“a$200loanwitha

fourteen-dayterm,ata$15feeper$100borrowed,willcostthecustomer$230.

Thistranslatestoa390%APRfora$200loan.”122Dependingonthetransaction

andthejurisdiction,“theAPRforapaydayloancanreachevenhigher,rangingfrom

400%toanastounding910%.”123Theborrowerwillnotrealizethatthisfeeis

actuallyanAPR,becauselendersdoeverythingtheycantomakesuretheborrower

doesn’trealizewhatthefeeis.Paydaylendersprofitenormouslyfromthis

deception.124

ProfessorSatzfurtheridentifiesdeceptivepracticespaydaylendersemploy

toreelinborrowers.“Affinitymarketing”schemesareusedtomisleadcustomers

intothinkingthattheloansofferedaregovernmentsanctioned.125Inaddition,

lendersencourageborrowerstotakealternativelendingtransactions,which“skirt

orevenbreak,thelawsattemptingtoregulatethepaydaylendingindustry.These

alternativelendingpracticesincludethesale-leasebacktransaction,thecash-catalog

saleandcash-backadvertising.”126

121EngleandMcCoy,supranote119,at129.122EngleandMcCoy,supranote119,at129.123EngleandMcCoy,supranote119,at129.124Seegenerally Martinsupranote3,at570.125Satz,supranote10,at133.ThismethodismostlyusedtorecruitMilitaryborrowers.126Satz,supranote10,at134.LooktoSatzarticletogetamoreindepthlookattheselendingmethods.

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Finally,debtcollectionoptionsthattraditionaldebtcollectorsmaynotuse

areavailabletopaydaylenders. 127Paydaylenderswillharasscustomersandtheir

employersandrelativeswithvexingtelephonecalls,threatenviolenceagainst

customersunabletorepay,collectexcessivedamagesfromcustomers,andthreaten

criminalprosecutionagainstcustomerswhofailtomakepayments.128Some

criminalbadcheckstatutesenableapaydaylendertocoerceborrowersintopaying

theirdebtstoavoidcriminalprosecution.129ProfessorSatzwrites,“Inthisway,

paydaylendersusethethreatofjailjustasaloansharkmighthaveusedthethreat

ofphysicalviolence.”130Someofthelendersfilecriminalcomplaintsinfaraway

jurisdictions,renderingitimpossiblefortheborrowertorespondtothesuit.131

Paydaylendersmayplaceaholdonadebtor’scheckingaccounttoenforcea

payment.132Complicatedarbitrationagreementsarenowemerginginpaydayloan

contracts,and“paydayloancompaniesrelyontheinterroremeffecttodissuade

consumersfrombringinglawsuits.”133Borrowerssignawayanymeaningfullegal

redressavailabletothem.134Whenitcomestoreceivingtheirmoney,thewolf

emergeswithcoerciveandfrighteningtacticstogetitspayments.Asthis

discussionmakesclear,paydaylendersengageinvariousconductatseveralstages

–frommarketing,issuingintheloans,andcollectingpayment–thatcanbe

127Satz,supranote10,at135.128CreolaJohnson,PaydayLoans:ShrewdBusinessorPredatoryLending? ,87Minn.L.

Rev.1,78.129Satz,supranote10,at135.130Satz,supranote10,at135.internalquotationsomitted.131Satz,supranote10,at135.132Id .133Id .at150.134Id .at137.

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describedasopportunisticoraggressiveatbest,andcoerciveandpredatoryat

worst.

IV.PAYDAYDEBTPEONAGE

PeonagestemmingfrompaydaylendingisalegitimateThirteenth

Amendmentproblemthatshouldgiverisetoremedialactionunderthis

constitutionalprovision.Asathresholdmatter,itisimportanttorespondtoan

importantanticipatedcriticism.Becausepaydaylendersdonotemploytheir

borrowers,somemightarguethatThirteenthAmendmentpeonageargumentsdo

notapplyinthiscontext.Thiscritique,however,takestoonarrowaviewof

peonageundertheThirteenthAmendment.Thelackofaliteralemployment

relationshipisinconsequentialasthecourtin Jaremillov.JosedelaCruzRomero

explained.Thecircumstancessurroundingtheloansrenderthemcoercive,andthe

loansaretieddirectlytothedebtor’spaycheck.Furthermore,

[t]he fact that the debts may have been voluntarily incurred is

irrelevant. The fact that the debtormay not betied toaparticularemployerortypeofworkisalsoirrelevant,sincethereasoningofthepeonagecasesdoesnotrestontheexistenceofaparticularemployer.Norissuchanordersavedbyitscivilnature,sincethekeystothejailarefoundonlyinthecoercedlaboritself.135 A.Peonage-EconomicallyTrapped,InvoluntaryServingPaydayLenders

Whilepaydaylendersarenotliterallythedebtors’employers,their

relationshipisanalogoustothetypicalemployer/employeerelationshippresentin

thePeonagecases.TheThirteenthAmendment,theAnti-PeonageAct,andjudicial

135MargaretHoward,BankruptcyBondage,2009U.ILL.L.REV.191,234.

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decisionsguaranteefreedomfromforcedlabortothosetrappedbyindebtedness.136

Thestructureofpaydayloanstrapsdebtorstotheirindebtedness,forcingthemto

workitoff.137Paydayloansaredesignedtomaintainaborroweruntilherpayday,

requirethedebtortosecuretheloanbyapost-datedcheckordebitauthorization,

andismeanttobepaidbackinonelumpsumwhentheconsumerreceivesher

paycheck,138thusthedebtorisquiteliterallyworkingoffthedebtforthepayday

lenders.Paydayloanshaveadirectrelationshiptothedebtor’slabor,andthefruits

ofherlabor.Likethecourtfoundin Jaremillo,theseloansholdadebtortofulfillher

debtandrenderherlaborsolongasthedebtremains.

Threatsofcriminalprosecutionforfailingtopaybackthedebtis

unconstitutionalundertheThirteenthAmendment,yetthisdoesnotstoppayday

lenders.139Theloanstructureissuingborrowerstheloanviaapost-datedcheckis

anothertoolofcoercion.140Paydaylendersthreatencustomerswhodonotpay

theirdebtwithcriminalprosecutionforwritingbadchecks,takingadvantageofthe

borrower’sfearprosecutionandjail.141Historicallypaydaylenderswouldthreaten

136KarenGross,TheDebtorasModernDayPeon:AProblemofUnconstitutional

Conditions,65NOTREDAMEL.REV.165,182.Ms.Grossdiscussestheanalogousrelationshipbetweenthe13thAmendmentandChapter7Bankruptcylaws.137Seegenerally Mendenhall,supranote94,at311(writing,“Thegoalofthesepaydayloansistomakeitnexttoimpossibleforconsumerstohavetheabilitytopayofftheloaninfullattheendoftheloanperiodwithoutneedingtoborrowagainbeforethenextpayday.”).138Martin,supranote3,at564.139Seegenerally Reynolds.140Seegenerally Johnson,supranote128,at87(furtherstating“[A]vailableevidenceshowsthatpaydaylendersthreatenprosecutionacrossthenation–eveninjurisdictionswheregovernmentalattorneyswillnotpursuebad-checkconvictionsagainstpaydayborrowers.”).141Johnson,supranote128,at87.

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topresentthewageassignment(nowreplacedbypost-datedcheck)tothedebtor’s

employer,whocouldterminatethedebtor.142Evenifpaydaylenderscannotlegally

prosecuteaborrower,theystillusethecriminaljusticesystemasacollection

agency,possessing“[a]strongeconomicincentivetothreatencustomerswith

criminalprosecution.Paydayloancustomerswilldowhateverittakestokeepfrom

goingtojail;thus,paydaylendersareassuredofgettingpaidaslongasconsumers

fearimprisonment.”143

Furthermore,thecycleofdebtthatadebtorfindsherselfinwhenshestarts

borrowingfrompaydaylendersiscoerciontomaintainthelaborfordebt

relationship.AsProfessorNathalieMartinpointsout,“veryfewcustomerscan

affordtopaybacktheloans.Rather…mostcustomersfinditnecessarytocontinue

topay$1000toborrow$500fortwentyweeks,ortopay$100ininteresteverytwo

weeks—fortherestoftime—onanoriginalloanof$400.”144Paydayloanfeesand

interesthikesareothertoolsofcoercion.Debtors,scaredbythemountinginterest

andtheunpaidprincipalmustworktirelesslyjusttokeepupwithpayments.145The

thoughtofaccruingmoredebtunderthetermsoftheloanisfrighteningtodebtors

asmanyofthemarealreadyspendingtheirentirepaychecktokeepupwiththe

payments.

Whileatfirstthedebtorentersintoapaydayloanvoluntarily,thenatureof

therelationshipbetweenthelenderandthedebtorpreventsthedebtorfrom142Martin,supranote3,at572143Johnson,supranote128,at96.144Martin,supranote3,at577.145SeegenerallyMendenhall,supranote94,at311-12(writingabouthowmountinginterestmakesitimpossibleforborrowerstopaybacktheprinciple).

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enjoyingany fruitsofherlabor,andiscoercive.146Itdoesnotmatterthattheloan

wasenteredintovoluntarily,aswefoundinBailey ;interestinglythoughrepeat

borrowersareoftenencouragedtodosobylenders,andfeelthattheymusttakeout

moreloansastheyarepayingtheentireamountoftheirpaychecktopayday

lenders.147

Somepaydayloansarenoteventrulyvoluntaryattheoutset.148Peoplewho

takeoutpaydayloansaredisproportionatelyapartoftheunderclass.149Professor

RandallKennedycharacterizestheconsequencesofbeingpoorasbeingparticularly

vulnerableto“terrorsofnature,badluckandcommunalfailure,”andfurtherargues

thattheunderclassturnstofinancialloansandpaydaylendersforfinancialsupport

oftentokeepthemafloatfinancially.150Aperson,whoagreestotakeoutanother

loansotomakeanexistingloanpaymentandpayrent,isarguablyundertheduress

146Bailey ,at241,S.Ct.at151.147Martin,supranote3,at575.AlsoseeURIAHKINGANDLESLIEPARRISH,CENTERFORRESPONSIBLELENDING,PAYDAYLOANS,INC.:SHORTONCREDIT,LONGONDEBT(March31,

2011)(“Thisrepeatedborrowingisaresultofthestructureofthepaydayloanproductitself-requiringaborrowertorepaytheentireamountduewithasinglepaycheckvirtuallyensuresthattheywillnothaveenoughmoneyleftovertogetthroughtherestoftheirpayperiodwithoutquicklytakingoutanotherloan.Borrowersaremisledbythepromiseofashort-termcreditproducttotakealoanthatisdesignedtokeepthemindebtedforextendedperiods.”)148Satz,supranote10,at133(“Thepaydaylendingindustrytargetscommunitiesinwhichindividualshavelittletonochoiceastowheretoobtainaloan.Theseindividualsare,ineffect,acaptiveaudience.”).149SeegenerallyMendenhall,supranote94,at308(“Consumerswhoenterthepaydayloanmarket“arenotevenlivingpaychecktopaycheck.Thesepeopleare

borrowingagainsttheirnextpaychecktomeetlivingexpenses.Themarketisstructuredaroundpeoplelivingbelowthemiddle-classinthiscountry.”Internalquotationsomitted).150RandallKennedy,ProfessorofLaw,HarvardLawSchool,U.S.’sDeepestFaultLine,BeforetheCenterforSocialCohesionconferencetitled“CantheUnitedStatedRemainUnited?”availableat http://cohesion.asu.edu/?p=536(lastvisitedNov.142011).

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oftryingtopreventanyoftheterriblealternativestonothavingthatmoney.151The

creditorknowsaboutthedebtor’scredit 152,income,debttheyowe,andthatthe

short-termcreditproductis“harmfulifusedonacontinuingbasis.”153Lendersare

indifferenttodebtorsborrowingtoavoideviction,lackofmedicine,hunger,etc.;

lender’smaingoalistomakeitnexttoimpossiblefortheborrowertopayoffthe

151Restatement(First)ofContracts§493(1932)reads:Duressmaybeexercisedby(a)personalviolenceorathreatthereof,or(b)imprisonment,orthreatofimprisonment,exceptwheretheimprisonmentbroughtaboutorthreatenedisfortheenforcementofacivilclaim,andismadein

goodfaithinaccordancewithlaw,or(c)threatsofphysicalinjury,orofwrongfulimprisonmentorprosecutionofahusband;wife,child,orothernearrelative,or(d)threatsofwrongfullydestroying,injuring,seizingorwithholdinglandorotherthings,or(e)anyotherwrongfulactsthatcompelapersontomanifestapparentassenttoatransactionwithouthisvolitionorcausesuchfearastoprecludehimfromexercisingfreewillandjudgmentinenteringintoatransaction.Therestatementgivesthefollowingexampleforclaused:“AthreatenstoejectimmediatelyB,atenantatwillwhoisillandunabletofindanotherresidenceat

once,unlessBsignsaleaseatdoubletheexistingrent.Bsignstheleasebecauseoffearofimmediateejectment.Iftherentdemandedisunconscionablethereisduress.ThoughAdidnotcreatethecircumstancesmakingdispossessionsoseriousamatter,oppressiveuseofthesecircumstancesmayamounttoduress.”TheRestatementgivesthefollowingexamplesforclausee:“A,abanker,holdsanoteofBwhohasbeendischargedinbankruptcy.Bneedsbankingaccommodationsinordertocarryonhisbusiness.AthreatensBthatunlessBsignsanewnoteinsubstitutionfortheoneheldbyA'sbank,AwillusehisinfluencewithallthebanksintheneighborhoodtopreventBfromhavingbankingaccommodation.Inducedbyfear,Bsignsanewnote.Thereisduress.”And“A,acreditorofB,threatensBtobringproceedingstohaveaguardianappointedforB,andtakechargeofhis

propertyunlesshewillsignanoteforA'sclaim.Bisanagedpersonofinfirmwill,andinducedbyfearsignsthenote.Thereisduress.”152SeeMartin,supranote3,at572(“Paydaylenderstypicallyassessaborrower'screditworthinessusingtheindustry-wideTeleTrackcreditreportingsystemandthenofferaloanthrougharetailstorelocation.”).153URIAHKINGANDLESLIEPARRISH,CENTERFORRESPONSIBLELENDING,PAYDAYLOANS,INC.:SHORTONCREDIT,LONGONDEBT2,(March31,2011).

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loan.154Lenderstakeadvantageofthesefears,thethreatofwagegarnishment,

furtherpoverty,afuturewithouttheabilitytotakeoutloans,andpossible

imprisonmenttoencouragedebtorstoborrowmore.155

ThisisnotunlikethedefendantsinMussry whoknewthattheirdomestic

servantshadnootherrecoursebuttoworkforthem.Lendersknowthatthe

debtorsaredesperate,andstrugglingtostayfinanciallyafloat.156Theyuse

psychologicaltacticstocoercedebtorsintothinkingthattheirloansaretheonly

waytostayfinanciallyafloat.

B.PaydayLoansperpetuatetheBadgesandIncidentsofSlavery

Trappedbypaydayloans,adebtor’sabilitytoescapetheirmarginalized

economicandsocialsituationisstunted–avalidThirteenthAmendmentconcern.157

Mobilityisrestricted,asittakescapitaltomove,andanyofthedebtor’sextra

154SeeMendenhall,supranote94,at311(discussingthepaydaylender’sintenttoputthedebtorintoadebtcycle).155SeegenerallyMendenhall,supranote94,at314(statingthatcollectionpracticesusedbypaydaylendersarenotdeposedonconsumersdefaultingfromtraditionalformsofcredit.).156SeegenerallyJohnson,supranote128,at63(stating“Oneresearchassistantobtainedatotalofnineloansinthreedays.Mostofthesubsequentlendersaskedwhytheresearcherneededanotherloansosoonafterthepreviousone.Inresponse,theresearchassistantgavevariousanswerssuchas‘TheloanIgotyesterdaywasn’tlargeenough,’‘Mypaycheckwasn’tbigenough,’and‘Ilostmoneygamblinglastnight.’EventhoughTele-Trackinformedtheselendersaboutexistingpaydayloans,mostgrantedtheloans.Withstatementssuchas‘It’snoneofmybusiness,’someloanclerksignoredsignsthataresearchassistantcouldbea

consumeringravefinancialtrouble…”)157Sidhu,supranote14,at51(stating“…thedenialofphysical,orhorizontal,libertyalsoestablishesacognizableThirteenthAmendmentproblem.Theinabilityofslavestomovebeyondacceptedboundariesortravelbroadlywasafundamentalpartofslavery…Accordingly,theSupremeCourtrecognizedthat“restraintof…movements”isan“inseparableincident[]oftheinstitution”ofslaverythatfallssquarelywithinthecoreoftheamendment’soriginalconcerns.”)

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capitalisdedicatedtowardpayingofftheseloans.Paydaylendersmakemostof

theirmoneyfromrepeatdebtors,158whichsuggeststhatthesedebtorsareconfined

notonlyfinanciallytoacycleofdebt,butgeographicallytoit aswell.Debtors

cannotmakeimportantlifedecisionssuchaswhethertomoveornot,whetherto

getmarried,orwhethertochangeprofessions.Thisinabilitytomakeimportantlife

decisionsareasymptomoftheseeconomicandsocialconditionsthatpresentvalid

ThirteenthAmendmentconcerns.

Thisphysicalisolationonlyperpetuatespaydayborrower’ssituation.

ProfessorSidhuwrites,“[i]mportantly,asaresultoftheirphysicalisolationand

exposuretotheconditionswithinthem,includinginadequatepubliceducation,the

probabilityofmodesteconomicsuccessfortheurbanunderclassispracticallya

foregoneconclusion.”159Like“theinabilityofslavestomovebeyondaccepted

boundariesortravelbroadly[afundamentalelementofslavery]”160,thepayday

debtorisunabletomoveoutofhisorherphysicallocationtoanotherthatmay

presentbettereconomicopportunities.Alargepartofthisisolationisduetothe

extremedebtthedebtorsfindthemselvesinbecauseofpaydaylenders.This

inabilitytomoveoutoftheirphysicalenvironmentisreminiscentofslave’sinability

toleavetheirmaster’splantation.161

TheargumentforaminimumstakeinsocietypositedbyProfessorAmaralso

callsforthefreedomofmovement.Physicalimmobilityis“anadditional

158Martin,supranote3,at573.159Sidhu,supranote14,at45.160Sidhu,supranote14,at51.161Sidhu,supranote14,at52.

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manifestationoftheabsenceofanominalstakeinsocietythattheThirteenth

Amendmentensures,asthemeaningfulfreedomofmovementisapreconditionfor

participationinthemoderneconomy.”162Furthermore,debtorstrappedbypayday

loansarenotaffordedthesameopportunitiesasthosewithacertainmeasureof

economicwherewithal(i.e.,themoreupperclasses),andthusdonothavea

minimumstakeinsociety.Paydaydebtorshaveanegativeamountofcapitalthat

keepsgrowinginthenegativeduetothenatureoftheloan.Whenthepoorhavea

growingnegativecapital,theybecomeconsumedwithkeepingupwithpayments,

becomingmoreandmoredependentonthepaydayloans.163Thiseconomic

dependencyProfessorAmarargues,iswhattheThirteenthAmendmentseeksto

eliminate.164Whentheunderclassdoesnothaveaminimumstakeinsociety,they

aremorevulnerabletosufferingfromthebadgesandincidentsofslavery.

InCaliforniaalone,repeatAfricanAmericanandHispanicborrowersspend

$247millioninpaydayloanfeesannually.165Thistakesmoneyawayfromtheir

communities,thatcouldbespentonbillsoremergencycostsandkeepingthe

borroweroutofdebt.TheCenterforResponsibleLendingfoundthatpayday

lenderswereabouteighttimesasconcentratedinneighborhoodsthatwere

predominatelyAfricanAmericanandLatinoascomparedtowhite

162Sidhu,supranote14.163SeeJohnson,supranote128,at56-57(“Thedefinitionofrollovershouldalso

includeborrowingfromPeterandpayingoffPaul–thatis,takingoutanewloanfromadifferent/secondlendertopayoffanoutstandingloanpreviouslyobtainedfromthefirstlender.”).164Amar,supranote83,at40.165WEILI,LESLIEPARRISH,KEITHERNST&DELVINDAVIS,CENTERFORRESPONSIBLELENDING,PREDATORYPROFILING;THEROLEOFRACEANDETHNICITYINTHELOCATIONOFPAYDAYLENDERSINCALIFORNIA24(Mar.26,2009).

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neighborhoods.166Seemingly,paydaylendersaretakingadvantageofthephysical

isolationofpoorminorities,perpetuatingabadgeofslaveryidentifiedin Jones-the

herdingofminoritiesintoghettosandinhibitingtheireconomicability.

Moreover,thecycleofdebtperpetuatedbypaydaylendersisahugefactorin

keepingtheunderclasschronicallydisadvantaged.Becausepaydaylenders

specificallytargettheunderclass,especiallytheminorityunderclass,theyare

exploitingtheeconomicconditionsthisclasslivesunder.167Moreover,payday

lendersactivelyworktokeeptheunderclass“under”,knowingpoorpeopleyieldthe

highestprofitsfortheirlendinginstitutions.168

V.CONCLUSION

Thepaydaylendingcrisisisasymptomofalargersocialmobilityproblemin

theUnitedStates–regulatingpaydaylenderswillbeasignificantsteptowards

improvingournation’seconomyandcreatingafairereconomyforourpoor.

UpwardsocialmobilityintheUnitedStateshasallbutbecomestagnantinrecent

166Id .at2.

167SeeJohnson,supranote128,at100(“Lenders,infact,targetwelfarerecipients,theoverwhelmingmajorityofwhomarewomen.TheAmericanAssociationofRetiredPeople(AARP)analyzedlocationsofcheck-cashingoutlets,overhalfofwhichofferpaydayloanservices,andfoundthatlow-incomeandminorityhouseholdsaresignificantlymorelikelytohavecheck-cashingoutletslocatedwithinonemileoftheirhomesthanhigher-incomeandnonminorityhouseholds.”).SeealsoSatz,supranote10,at138(“Paydaylenderknowtheirmostprofitable

customerbase–cash-strappedconsumerwithlittlefinanciallysavvy…”).168SeegenerallyMartin,supranote3,at575-576(“Lendersencourageemployeestogetcustomerstotakeoutasmanynewloansaspossible…Asoneformeremployeeexplained:“Weweretrainedtoencouragecustomersthedaytheypaidaloanofftomakeanotherloanasearlyasthenextday.Wetriedtogetcustomerstokeepgettingloansandborroweruptotheirmaximumapprovalamountwhethertheywanteditornot…”).

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years,andpaydaylendersprofitoffofandpromotethisstasis.Toillustrate,in

Denmark,Norway,Sweden,Finland,andtheUnitedKingdom,twenty-threepercent

ofsonsanddaughtersborntofatherswhowereinthebottomfifthoftheir

countries’earningsremainedinthebottomfifth.169Forty-twopercentofsonsand

daughtersremainedintheUnitedStates.170TheU.S.Censusreported46.4million

peoplewerelivinginpovertyin2010,thehighestpovertyratesince1959.171

Alendingindustrythatprofitsoffofaweakeningeconomyandtargetsthe

underclassastheirmostlucrativeborrowerscreatesconstitutionalconsequences

thatmustbeaddressed.Thetermsoftheseloans,thecoercivenatureofthelenders,

andthedemoralizinganddestructiveconsequencesfortheborrowersreflect

exactlywhattheframersoftheThirteenthAmendmentsoughttoeliminate.Aline

canbedrawntodistinguishpaydayloansfromothertypesofloans.Historically,

loanshavenotbeeninterest-onlyloans.172Noteveryloanpresentstheissuesof

peonageandpromotionofthebadgesandincidentsofslaveryasameansofgreater

income.Paydayloanconsumersmustbeprotected.Theseloansattheveryleast

mustberegulatedtodoawaywiththeirinvoluntaryservitude.Seventeenstates

169ScottWinship,NATIONALREVIEWONLINE,MobilityImpaired (Nov.7,20114:00AM)availableat http://www.nationalreview.com/articles/282292/mobility-impaired-scott-winship?pg=3.170Id .SeealsoTHEORGANIZATIONFORECONOMICCO-OPERATIONANDDEVELOPMENT(OECD),AFAMILYAFFAIR:INTERGENERATIONALSOCIALMOBILITYACROSSOECDCOUNTRIES,6availableathttp://www.oecd.org/dataoecd/2/7/45002641.pdf (statingthat

existingestimatesoftheextenttowhichsons’earningslevelscorrelatewiththoseoftheirfathersfindpersistencetobeparticularlypronouncedinthe…UnitedStates…).171NumberinPovertyandPovertyRate:1959to2010,U.S.CensusBureau,availableat http://www.census.gov/hhes/www/poverty/data/incpovhlth/2010/figure4.pdf.172Peterson,supranote109.

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havealreadyeffectivelybannedpaydaylenders;173continuingthistrendwould

solvethisconstitutionalissuemosteffectively.Untilallstatessafeguardborrowers

frompaydaylenders,federalinvolvementisappropriateandtheThirteenth

Amendmentis,asIhaveshown,aproperfederalmechanismthatCongressmayuse

toregulatepaydaylending.

ThereisadangerinnotrecognizingThirteenthAmendmentissuespayday

lenderspresent.ThereisessentiallyacasteinAmericansocietythathasextremely

limitedeconomicopportunity,nopoliticalstakeintheircommunity,andissocially

isolated;thisraisesseriousThirteenthAmendmentconcerns.Paydaylenderstrap

analreadyvulnerablegroup,keepingthemtetheredtothedireeconomicsituation

thattheyliveinwhileprofitingfromit.

Thereisasolutionalreadyinplaceinourconstitution.Neverhasthe

SupremeCourtstruckdownCongresswhenexercisingitsThirteenthAmendment

powers.TheThirteenthAmendmentisavehiclethatCongresscanusetoregulate

paydaylenders.Institutingfederalusurycapswouldhalttripledigitinterestrates

inthiscountry,andprovidelegalprotectionforthepoor.174Placinganationalusury

cap175onthesetypesofloanswouldbeahugestepinpreventingthecycleofdebt

promotedbypaydaylenders.Borrowerswouldstillhavetheopportunityto

173OnlinePaydayLoanscomewithaHighPrice,CBSEveningNews,availableat http://www.cbsnews.com/video/watch/?id=7382455n.174Federalusurycapswouldprotectthepoorfromonlinepaydaylendersaswellaspaydaylendingshopsintheirneighborhoods.175Black’sLawDictionary(9thed.2009).usury(yoo-zh<<schwa>>-ree),n.(14c)1.Historically,thelendingofmoneywithinterest.2.Today,thechargingofanillegalrateofinterestasaconditiontolendingmoney.3.Anillegallyhighrateofinterest.

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borrow,buttheimpossibleinterestratesthatactasastrangleholdtodebtors

wouldnotbeapartoftheloans.

ThereisabroaderdangerifwefailtoactonthisThirteenthAmendment

problem.Ifwefailtorecognize,andremedy,thefactthattheunderclassinAmerica

isbeingpreyeduponbytheselenders,wefailtorecognizethattheunderclassisa

viablepartofoureconomyandoursocietythatdeservethesameprotectionsas

thosewhoalreadyhaveaminimumstakeinsociety.Theunderclasswillcontinueto

bedisempowered,andwillcontinuetosufferfromthebadgesandincidentsof

slavery.Ifourcountryallowspaydaylenderstocontinuetoprofitofftheunderclass

becauseoftheireconomic,politicalandsocialisolation,ourcountryisnotonly

approvingthesepredatorypractices,butsayingthatitisacceptableforthe

underclasstobeshackledtotheirplaceinsociety,andthatitisacceptablefor

peopletoprofitovertheirsuffering.

Finally,toallowpaydaylenderstocontinuepreyingontheunderclass,to

allowthemtocontinuemakingloansthatdefactoenslaveborrowersistoallow

paydaylenderstoactagainstthepurposeoftheThirteenthAmendment,foritisan

acttakenagainstdemocracy,againstthedignityofthetoilingmillions,against

liberty,thepeace,thehonor,therenown,andthelifeofthenation.176

176 Syntax inspired by Senator Wilson in the Thirteenth Amendment debates