400+ Organizations Urge CFPB: Stop Attack on Payday Lending Protections

Stop the Debt Trap Coalition Letter Opposes the CFPB’s Proposal to Gut Consumer Protections on Predatory Payday Loans

Washington, DC – Over 420 civil rights, consumer, labor, faith, veterans, elder, business, and community organizations from 46 states, plus the District of Columbia, in an official comment letter registered strong opposition to the Consumer Financial Protection Bureau’s (CFPB) proposal to gut the safeguards on payday and car title loans. These groundbreaking consumer protections, created in 2017 by the agency’s prior leadership, would require lenders to confirm that a borrower has the ability to repay a loan before it is issued.

The payday lending business model is currently built around trapping borrowers in a cycle of debt, a fact previous CFPB leadership sought to address. Payday loan interest rates average over 300% APR. The CFPB’s own research showed that nearly four out of five payday borrowers have to re-borrow to pay off their original loan, and that the payday lending industry extracts 75% of their revenue from borrowers with more than ten loans per year.

You can find excerpts of the letter below and you can read the letter to the CFPB in its entirety here:

“Hundreds of organizations all across the country earlier called for a strong Bureau rule to stop the debt trap, including by urging the Bureau to finalize a rule more protective of consumers than the one it issued in 2017. We have known since before the 2017 Rule was finalized that the payday lenders—a powerful, well-resourced, savvy lobby—would pull out all the stops to preserve their debt trap business model, including through Congress and through the courts.


“We are painfully aware of the severe harm that unaffordable payday and car title loans cause to the communities we represent. Payday lenders concentrate themselves within low-income neighborhoods and far more heavily—even controlling for income—within communities of color, making loans without assessing whether borrowers can repay them. Unaffordable payday and car title loans set debt traps—long series of loans that drive borrowers deeper into financial distress and often to financial ruin. The debt trap is the lenders’ business model.


“The Bureau’s proposed repeal relies on fabricated rationales in support of prejudged conclusions to give predatory lenders what they want. It is an abdication of the Bureau’s statutory mandate and a betrayal of every financially distressed American preyed upon by unaffordable payday and car title loans. As president and CEO of the Leadership Conference on Civil and Human Rights, Vanita Gupta, recently said, a rescission of the Ability-to-Repay Rule would be ‘a slap in the face to consumers—especially people of color—who have been victims of predatory business practices and abusive lenders.’ The Bureau’s attack on the ‘unfair’ and ‘abusive’ standards broadens that betrayal to virtually every American who, at one time or another, will be harmed by unscrupulous financial practices.”

The CFPB, as with other government agencies, is legally required to consider public comments before issuing a final rule. The comment period of this proposal to unravel the rule ended yesterday.


Stop The Debt Trap is a coalition of civil rights, consumer, labor, faith, veterans, seniors and community organizations from across the nation who are committed to ending payday loan debt traps