Predatory lending practices, like payday and car title lending, make small business owners like David Borris anxious because lenders drain hard-earned money from customers out of the community.
Borris, owner of Hel’s Kitchen Catering in Illinois, says, “the success and well-being of a small business are inextricably tied to the success and welfare of its community. When consumers turn to payday lenders in their time of need, only to face the resulting financial turmoil, small businesses realize the impact on their revenue sheets.”
Everyone agrees that protecting small businesses is crucial to local economies. When their customer base is caught in predatory lending debt traps, small businesses are also hit hard. On June 2nd, the Consumer Financial Protection Bureau (CFPB) released a proposed rule with the potential to be of real help to small businesses and their customers. If strengthened, the rule could curb predatory payday lending abuses, substantially transforming the climate in which small business owners operate.
Main Street Alliance posted about the rule:
“Since the CFPB started its rule-making process last March, the payday loan industry has extracted more than $10 billion from local communities, right out of the cash registers of the “Mom and Pop” shops and restaurants at the center of the local economy. Meanwhile, the industry has spent $13 million in political donations and in lobbying Congress against reasonable rules, silencing the voices of small business owners.”
‘”We applaud the CFPB for issuing its proposed rule that reins in predatory lending, protects my customers and employees from the perpetual cycle of debt created by payday and car title lending, and returns the wealth of communities to the consumers that drive small business growth,” says David Borris.
Read more at the Huffington Post:
“The [CFPB] rule, as it stands, contains several loopholes that need to be fixed, and industry lobbyists are mounting a full-fledged attack to weaken it further. It’s up to us to stand up in the best interest of our businesses, our employees and our customers. For the next two months, you can join the effort to take on predatory payday lending practices by submitting comments to the CFPB and urging them to strengthen their rule, close the loopholes, and rein in payday lending.”