For Immediate Release
Grassroots Group Responds to CFPB Payday Lending Rule, Pledges to Continue Fight to Protect Families from Predatory Lenders
National People’s Action joins hundreds of advocates arriving in Kansas City today to comment on proposed rules for payday, car title and payday installment lending. More events being held nationwide calling for strong rules.
Kansas City, MO - Today, as the Consumer Finance Protection Bureau releases their long-awaited proposed rule on payday lending, opening the period for public comment, members of National People’s Action (NPA) across the country are taking action and speaking up.
NPA, which has been working to reform the predatory lending industry for years, is pleased that the process is moving forward, but is disappointed with the initial proposal. NPA and the families we work with, pledge to continue fighting to make sure the protections are as strong as possible.
“We’ve been working towards this day for years,” said George Goehl, executive director of National People’s Action. “For decades, predatory payday lenders have gotten away with taking money from people who didn't have much to begin with. With interest rates north of 300 percent, and a business model based on trapping people in debt, they’ve been allowed to strip wealth from families and communities.
“The CFPB must live up to its mission of protecting consumers from deceptive and abusive financial practices by writing a rule that will put a stop to the abuses that are endemic in the small dollar lending industry,” said Goehl.
“These products aren’t safe,” said Ken Whittaker, a Detroit resident and member of National People’s Action affiliate, Michigan United. “I took out two loans for $700 which spiraled into a cycle of debt that ended up costing my family more than $7,000. These predatory lenders harassed my family and reached into my bank account to take most of my paycheck so I could barely survive. They even garnished my tax returns.”
National People’s Action is calling for a strong and broad payday, car title and payday installment lending rule. It must meet three basic criteria to protect American families:
- The rule should require income and expense underwriting practices on all loans to ensure American consumers can affordably pay back the loan.
The rule should put a stop to the constant loan rollovers and refinances that are rife in the industry and are hallmarks of the debt trap.
The rule should prevent lenders from taking money directly from a borrower’s bank account or holding unlimited title to their car.
“We’re clear about what the CFPB needs to do to fulfill their mission of protecting consumers. They need to write a rule that shuts down the debt trap,” said Liz Ryan Murray, Policy Director for National People’s Action. “Time after time, we’ve seen this industry worm their way through loopholes much smaller than these. That’s why we need a rule that’s stronger than this proposal. Millions of people across the country are depending on the CFPB to get this right and we’re going to make sure the Bureau hears from them.”
National People’s Action and its partners across the country plan to generate tens of thousands of comments to the Consumer Financial Protection Bureau from borrowers, faith and community leaders, and people of conscience calling on the CFPB to ensure the final rule contains these commonsense safeguards.
Members of the organization from across the midwest are traveling to Kansas City today to offer testimony at the CFPB’s field hearing. They’ll be joining members of PICO National Network and other members of the Stop the Debt Trap Coalition at a public rally at 12:30 p.m. in Barney Allis Plaza. They will demand strong rules – a demand that will be echoed by events in dozens of other states including Illinois, Idaho, Michigan, Wisconsin, Nevada and Tennessee.
Later in the afternoon, members of National People’s Action who are in Kansas City will be visiting a payday storefront, calling on lenders to stop deceiving their members about the CFPB’s proposed rules.
“Payday lenders thrive on lies and deception,” said Cherie Mortice a community leader from Des Moines, Iowa and a member of National People’s Action affiliate Citizens for Community Improvement. “They’ve spent thousands of dollars trying to win over elected officials and deceive customers about this common sense new rule from the CFPB. We want to make sure the industry doesn’t interfere with the public comment period, when our communities are supposed to get their say.”