Today, the Consumer Financial Protection Bureau (CFPB) repealed critical protections for people harmed by payday and car title loans. On August 2017, the CFPB finalized new rules to stop the debt trap of payday and car title loans. At the heart of these protections was a basic tenant of responsible lending: ensuring lenders assess a borrower’s ability to repay a loan without the need to re-borrow or default on other bills. These new protections were issued after five years of research, market assessment, and input from consumers and industry alike that included over 1 million public comments. HOPE was part of a small business review panel that provided input into formulating the protections, and supported them in their final form. HOPE CEO, Bill Bynum, also chaired the Consumer Advisory Board when the rule was released. Today, Director Kathy Kraninger announced a repeal of these payday lending protections, putting Deep South families at financial risk.
Statement by William J. Bynum, CEO, HOPE:
“Across the Deep South, payday and car title lenders drain more than $1.6 billion a year in fees on loans carrying 300% APR or more. Daily, we see the devastation caused by these predatory lenders in our communities and on the lives of our most vulnerable residents who are elderly and low-income. It is incredibly disappointing that the agency charged with the mission of protecting consumers has chosen to favor high cost lenders over the people harmed most by their practices. To ensure people are not exploited by these practices, states and Congress should move to lower the cost of these loans to 36% APR or less, and states with strong laws already in place, such as Arkansas, must preserve these critical protections.”
Resources:
HOPE Comment to CFPB Opposing Repeal of Payday Lending Protections: http://hopepolicy.org/blog/hope-opposes-payday-loan-rule-repeal/
