Jewish Leaders Urge CFPB to Act on Predatory Payday Loans

As the Jewish High Holy Days begin with Rosh Hashanah, members representing 15 different organizations working in the Jewish Community met with Consumer Financial Protection Bureau Director Richard Cordray to deliver a letter and ask the Bureau to put out strong rules that stop the debt trap created by abusive payday loans. Faith leaders are particularly troubled by high-interest, predatory lending, which is condemned in the holy texts of many different religions.

Jewish community leaders meeting with Director Cordray.

The Jewish tradition commands a year of release (shmitta) from debt every seven years to stop people from being oppressed by debt indefinitely. In their letter, the organizations write:

Thus, it is an appropriate year for the American Jewish institutions listed below to call upon our wider society to regulate abusive practices in the payday and car title markets. In Jewish tradition, regulation known as shmittat kessafim—the release of money—was instituted as a safeguard for debtors. As a larger society, we can agree that exorbitant rates of interest and loans that result in a cycle of re-borrowing are unacceptable. In today’s marketplace lenders should only be allowed to extend loans that fit within a borrower’s budget without having to re-borrow. Loans should not be allowed to continue for unreasonable amounts of time.

Read the full letter.

Organizations signing the letter include: Bend the Arc: A Jewish Partnership for Justice, Carolina Jews for Justice, Commission on Social Action of Reform Judaism, Habonim Dror North America, JALSA, the Jewish Alliance for Law and Social Action, Jewish Community Action, Jewish Community Relations Council of the Milwaukee Jewish Federation, Jewish Council for Public Affairs, Jewish Council on Urban Affairs, Jewish Social Policy Action Network, Jews for Racial and Economic Justice, Jews United for Justice, Rabbinical Assembly, T’ruah: The Rabbinic Call for Human Rights, Uri L’Tzedek.

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