People’s Action Institute Urges CFPB to Strengthen Payday Lending Rule on Closing Day of Public Comment Period
Delivers policy comment and hundreds of thousands of shorter comments calling for strong rules to reform the payday and car title industry
WASHINGTON – Grassroots groups are making a final push for the CFPB to strengthen proposed rules for the payday lending industry on the last day of the public comment period that has seen a heated battle between fair lending advocates and the payday lending industry.
Advocates say the proposed rule still has far too many loopholes to effectively rein in an industry where unfair, abusive and deceptive financial practices run rampant. People’s Action Institute has submitted an official comment.
“We fought hard for the creation of the CFPB, a government agency with a mandate to protect everyday people from unfair financial practices,” said Liz Ryan Murray, policy director for People’s Action Institute. “The payday lending industry is rife with just the kind of practices the CFPB was created to prevent.
“Payday lenders say they’re providing access to much needed credit to families. But in fact, they offer concrete boots to a drowning man. Families need affordable credit, not loans that trap them in debt indefinitely. The CFPB’s proposed rule still gives far too much wiggle room to an industry with a long track record of regulatory evasion. It must be fixed,” said Ryan Murray.
On Wednesday, People’s Action Institute released a report called Caught in the Debt Trap that highlights the real damage payday loans have on the lives of everyday people.
Recent reports show that payday lenders are pushing borrowers to make phony comments at loan offices across the country. However, the report from People’s Action Institute shows just how destructive payday loans can be.
People’s Action Institute is also leading a final push of payday comments calling for a stronger rule. People’s Action Institute and its affiliates have collected more than 100,000 comments, adding to the more than 400,000 comments collected with the Stop The Debt Trap Coalition.
People’s Action Institute has joined with allies on a detailed policy comment, as well as submitting their own comment, calling for fundamental changes to strengthen the proposed rule that is based on the simple premise that every loan must be able to be affordably repaid.
Specifically, People’s Action Institute is calling on the CFPB to:
- Close the loophole allowing six loans per year at 300 percent interest.
- Strengthen protections on flipping both long-term and short-term loans.
- Strengthen how lenders document basic living expenses and require the use of objective measures to determine if a borrower can afford the loan.
Here is the policy comment from People’s Action Institute.
People’s Action Institute is a national research and policy organization working for economic, racial, gender and climate justice with more than a million volunteers in 29 states.