WARREN, OH – Senator Sherrod Brown (D-OH) met with community members, local service organizations, and former borrowers on June 27th to advocate for public action to help #StopTheDebtTrap caused by predatory lending. The CFPB has proposed a rule to crackdown on predatory lending, and comments submitted to the CFPB through September 14th will ensure a strong final rule.
Senator Brown emphasized the importance of capitalizing on the opportunity to regulate an industry that traps people in a cycle of debt, and highlighted how harmful predatory lending is to Ohioans. “Payday lenders want you to borrow whether you can pay it back or not, and then come back again and again and again,” Brown said.
Brown spoke alongside Christina Sarno and Latita Parnell, former borrowers and residents of Warren, and Ginny Pasha, president of the United Way of Trumbull County.
Sarno, a single mother, was caught in the debt trap after turning to payday and car title loans to make ends meet. Like countless borrowers, Sarno lost her car as a result and would have been broke and homeless had it not been for the support of the Beatitude House of Warren. Parnell lost her car and was forced to declare bankruptcy because of her loan. Support from Wings of YWCA now has her on her feet and on a path to owning her own home.
“Financial products like payday lenders and auto title companies are enticing for those in immediate need but create dangerous situations for borrowers to where they fall deeper into debt from which they can’t get out,” said Pasha. Predatory lending products disproportionately harm women and young families in low-income communities, but all Ohioans suffer from the economic impact of predatory lending.
A study by the Center for Responsible Lending found that there are 836 payday loan storefronts in Ohio alone, and that these loans generate more than $500 million in predatory loan fees in a given year. To stop the cycle of predatory lending, Brown said Ohioans must make their voices heard by telling the CFPB that they want to be protected from predatory lending.
The rule proposed by the CFPB on June 2nd would require lenders to ensure borrowers can afford to pay off a loan on time, with consideration of their income and expenses, without being late on other bills. Comments in support of a strong rule submitted to the CFPB by September 14th will ensure that lenders don’t have loopholes to continue their predatory practices.
To help #StopTheDebtTrap, Senator Brown encourages Ohioans to submit comments that tell the CFPB to make a strong final rule to regulate predatory lending and to share their personal stories of being caught in the debt trap.