On February 6th, the CFPB announced their plans to gut crucial protections that would stop payday lenders from trapping consumers in spiraling debt.
The existing rule establishes the common sense requirement, typical of other types of loans, that lenders should have to verify a borrower’s ability to repay a loan before issuing it. The new CFPB leadership is taking away a basic consumer protection against abusive payday and car title loans and disregarding more than 5 years of research, data collection, field hearings, and public comment that went into the 2017 payday rule.
Following the announcement, groups far and wide were outraged at the move to hand the payday lending industry a boon and called on the CFPB to fulfill their mission to protect consumers. This compendium of opposition to the repleal collects the press coverage, statements issued and social media generated following the news that the CFPB would leave consumers without important protections.
Stop the Debt Trap coalition was among the first groups to call out the CFPB’s move to gut protections from predatory payday lenders. Civil rights groups, like, UnidosUS, NAACP and The Leadership Conference, helped lead the charge against this latest move to help predatory payday lenders trap consumers in debt traps.
Among those who voiced their outrage was House Financial Services Committee Chairwoman Maxine Waters: “This proposal essentially sends a message to predatory payday lenders that they may continue to harm vulnerable communities without penalty.”
Ranking Member on the Senate Committee on Banking, Housing, and Urban Affairs, Senator Sherrod Brown voiced his opposition to gutting the common sense payday rule, soberly stating “The CFPB is helping payday lenders rob families of their hard-earned money.”
Senator Jeff Merkley’s statement follows the sentiment of the greater American public, outside of the payday industry, that “this payday predator plan is a huge mistake and a crystal clear sign of where the Trump Administration sides when it comes to working families.”
A huge thank you to Representatives “Chuy” Garcia, Robin Kelly, Katie Porter, Jan Schakowsky, and Senators Tammy Baldwin, Tammy Duckworth, Dick Durbin, Doug Jones, Ed Markey and Elizabeth Warren for their work on protecting consumers and holding the industry accountable for their actions.
MSNBC’s Stephanie Ruhle grilled an industry executive on her show, telling him to his face that the practices used by the payday lenders are “predatory, it is so abusive to the people who need the most help out there.” To keep the payday loan shark accountable, she requests “If we got it wrong, explain it.”
Linda Jun of AFR was quoted across major publications. Among those were New York Times’ coverage of the story: “It’s not like the agency wrote the old rule on a whim,” she said. “It was the outcome of a five-year process, with a lot of research and conversations with stakeholders on all sides. To essentially say ‘just kidding’ and toss it aside is extremely disconcerting.”
Notable Social Media
The announcement quickly found a frustrated audience on social media, as AP reporter Ken Sweet’s tweet announcing the plans went viral. Sweet later spoke with PBS NewsHour to break down his coverage. State Attorneys General in Pennsylvania, North Carolina, New Jersey, and California voiced their strong opposition to the plan on Twitter. Other onlookers simply offered dry commentary — foreign policy consultant Molly McKew memorably asked “Which member of the Cabinet is a payday lender again?”
On the other side – payday lenders are celebrating the move
We will be keeping this compendium updated with full news coverage, press statements, and notable social media – keep an eye out for additional coverage!