Warn Agency that Weak Rule will Usher in New Wave of Predatory Lending
Deliver Letters Urging CFPB Not to Undercut Strong State Laws that Prohibit Payday Loans
A coalition of two dozen faith leaders, and labor, civil rights, and community groups from states that ban payday lending hand-delivered strongly-worded letters to Consumer Financial Protection Bureau Director Richard Cordray on Wednesday, calling on the federal agency to “use its full authority” to crack down on predatory payday lending.
The CFPB is expected in coming weeks to issue the first-ever payday lending rules at the federal level after releasing a preliminary outline of the rules in 2015. Groups expressed serious concern that weak federal rules would jeopardize their states’ strong bans against payday lending, and urged the CFPB to take a bold approach in its forthcoming payday lending rules.
“It’s time to end predatory lenders’ exploitation of people struggling to get from paycheck to paycheck,” said Andy Morrison, campaigns coordinator at New Economy Project. “Targeting low-income communities and communities of color with unaffordable loans is immoral, and the CFPB should not allow it.”
The letters were signed by more than 500 elected officials and groups based in states that already ban payday lending, and were gathered by 13 states that are part of the PaydayFreeLandia coalition, which represents all 14 states in the U.S., plus the District of Columbia, where payday lending is categorically prohibited.
It their letters, coalition members emphasized that their 14 states plus DC make up nearly one-third of the total US population: “Ninety million Americans live in payday loan-free states, and we know they are far better off without payday lending. We will continue to fight to keep high-cost loans out of our states and communities.”
Read the letters from 13 states here: