Puerto Rico’s payday loans: The shocking story behind Wall Street’s role in debt crisis

Via DN

On June 30, President Obama signed into law the PROMESA bill, which will establish a federally appointed control board with sweeping powers to run Puerto Rico’s economy. While the legislation’s supporters say the bill will help the island cope with its debt crisis by allowing an orderly restructuring of its $72 billion in bond debt, critics say it is a reversion to old-style colonialism that removes democratic control from the people of Puerto Rico. But does Puerto Rico really owe $72 billion in bond debt—and to whom? A stunning new report by ReFund America Project reveals nearly half the debt owed by Puerto Rico is not actually money that the island borrowed, but instead interest owed to investors on bonds underwritten by Wall Street firms including Goldman Sachs, Citigroup, Merrill Lynch and Morgan Stanley. While the Puerto Rican people are facing massive austerity cuts, bondholders are set to make mind-boggling profits in what has been compared to a payday lending scheme. For more, we speak in San Juan, Puerto Rico, with Carlos Gallisá, an attorney, politician and independence movement leader. And in New York, we speak with Saqib Bhatti, director of the ReFund America Project and a fellow at the Roosevelt Institute. He is co-author of the new report, “Puerto Rico’s Payday Loans.”