For Immediate Release:
February 14, 2018
U.S. House Votes to Condemn Working Families to a Never-Ending Cycle of Debt
WASHINGTON, D.C. – In a mostly party-line vote, the U.S. House of Representatives today approved legislation that could allow predatory payday lenders to ignore existing state laws capping the interest rate lenders could charge borrowers seeking a short-term loan.
HR 3299, along with its Senate companion bill S 1624, could allow short-term lenders to partner with banks to circumvent state law and make loans of 300 percent annual interest or higher. To-date, 42 states plus the District of Columbia have put in place some kind of interest rate cap to protect consumers living in their state from falling victim to unaffordable payday loans. These state-based efforts have saved borrowers billions annually in payday loan fees.
Prior to today’s vote, more than 200 organizations involved in the Stop The Debt Trap campaign, a coalition of civil rights, consumer, labor, faith, veterans, seniors and community organizations from all 50 states, released a letter urging Members of Congress to reject HR 3299. The letter – which can be read in its entirety here – points out that the bill poses a serious risk of enabling predatory lending and unsafe lending practices.
The Stop the Debt Trap campaign released the following statement:
“We are deeply disappointed by the U.S. House of Representatives’ partisan vote to condemn working families to a never-ending cycle a debt. The inaptly named Protecting Consumers’ Access to Credit Act in reality takes away the strongest tool consumers currently have to protect themselves from predatory payday lenders. Payday lenders will exploit HR 3299 to preempt state law and make it easier to make high interest rate loans that borrowers do not have the ability to repay.”