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center for responsible lending
Trump CFPB Accused of Siding With 'Bottom-Feeder' Payday Lenders Over Struggling Workers
"A policy of 'hear no evil, see no evil, punish no evil' is a sure-fire way to promote lawless behavior," said one advocate.
Mar 31, 2025
"Regulatory relief for small loan providers" was how the Trump administration described its decision not to prioritize enforcing a rule meant to protect people who are financially struggling from predatory payday lenders—but one consumer protection advocate said Monday that the announcement signals a policy that that is certain to "promote lawless behavior" by corporations.
The Consumer Financial Protection Bureau (CFPB), whose actions aimed at protecting working families and consumers from big banks and other corporations have been attacked for years by Republicans, announced last Friday that under the Trump administration, it will not enforce a rule meant to safeguard people from fees they accrue when payday lenders repeatedly attempt to debit their accounts.
Part of the 2017 payday loan rule, the bounced payment rule was set to go into effect on Sunday—barring payday lenders, "buy now, pay later" (BNPL) lending services, and other predatory lenders from continuing to make attempts to debit bank accounts after a loan customer's payment bounced twice. The lenders would be required under the rule to gain the customer's permission after two failed attempts to retrieve the payment.
When the CFPB announced last year that the rule was set to go into effect on March 30, 2025, it noted that it had "found one instance of a lender making 11 failed withdrawal attempts in one day"—subjecting the consumer to "a pile of junk fees" including nonsufficient (NSF) funds fees, overdraft charges, and others.
Adam Rust, director of financial services for the Consumer Federation of America, said Monday that the CFPB had "sided with bottom-feeder payday lenders at the expense of vulnerable borrowers struggling to make ends meet."
"The CFPB is designed to be a law enforcement agency," said Rust. "A policy of 'hear no evil, see no evil, punish no evil' is a surefire way to promote lawless behavior."
The agency said it would also not enforce rules applying to vehicle title loans, which can have high interest rates and are banned or limited in at least 30 states.
Lauren Saunders, associate director of the National Consumer Law Center, noted that former CFPB Director Kathy Kraninger, the U.S. Supreme Court, and the 5th Circuit previously upheld "the bare minimum protection against multiple NSF fees on unaffordable loans."
"It's outrageous that the CFPB will not enforce the law that prohibits payday lenders and other 200% APR lenders from continually debiting people's accounts, subjecting them to multiple NSF and overdraft fees," said Saunders. "Buy now, pay later lenders that make unaffordable loans should not be allowed to keep hitting your bank account after payments bounce twice. It's unconscionable to have greater protections for payday lenders than for people struggling to afford basic necessities."
A Pew survey in 2013 revealed that 1-in-4 payday loan customers faced an overdraft fee due to the lender's attempt to collect a payment from an account with insufficient funds.
The CFPB said it was contemplating "issuing a notice of proposed rulemaking to narrow the scope of the rule."
"By allowing payday lenders to repeatedly debit borrowers' empty bank accounts," Nadine Chabrier of the Center for Responsible Lending told Consumer Affairs, "the CFPB's political leadership is giving a free pass for payday lenders to kick people when they're down."
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Trump Attacks Public Service Workers With 'Blatantly Illegal' Loan Forgiveness Order
"Threatening to punish hardworking Americans for their employers' perceived political views is about as flagrant a violation of the First Amendment as you can imagine," said one critic.
Mar 10, 2025
Criticism of U.S. President Donald Trump's executive order intended to limit a program that forgives the federal student loans of borrowers who take public service jobs has grown since he signed it on Friday.
Opponents frame the order as yet another attempt by Trump to quash dissent. The Republican president directed Education Secretary Linda McMahon to propose revisions to the Public Service Loan Forgiveness (PSLF) Program, in coordination with Treasury Secretary Scott Bessent, to exclude "organizations that engage in activities that have a substantial illegal purpose."
The order targets employers "aiding or abetting" violations of federal immigration law and the administration's definition of illegal discrimination, engaging in a pattern of violating state law such as disorderly conduct and obstruction of highways, "supporting terrorism," and "child abuse, including the chemical and surgical castration or mutilation of children or the trafficking of children to so-called transgender sanctuary states for purposes of emancipation from their lawful parents."
Student Defense president Aaron Ament said in a statement that "when PSLF was created by a bipartisan act of Congress and signed into law by [President] George W. Bush, it was a promise from the United States government to its citizens—if you give back to America, America will give back to you."
"In the nearly two decades since, across administrations of both parties, Americans have worked hard and made life decisions under the assumption that the U.S. keeps its word," Ament continued. "Threatening to punish hardworking Americans for their employers' perceived political views is about as flagrant a violation of the First Amendment as you can imagine."
Nadine Chabrier, senior policy counsel at the Center for Responsible Lending, similarly highlighted "serious" First Amendment concerns, saying that "by penalizing individuals seeking loan forgiveness for their associations and the expressive conduct of their employers, new rulemakings could infringe on fundamental rights to speech and association."
"The executive order also undermines the very purpose of PSLF, which Congress established to encourage careers in public service across a broad range of fields," she said. "Stripping PSLF eligibility from nonprofit employees based on the nature of their work will deter skilled professionals from pursuing careers that benefit the public good, weaken critical services for underserved populations and hamper efforts to strengthen vulnerable communities."
American Federation of Teachers (AFT) president Randi Weingarten explained that "PSLF is based on the idea that borrowers who make 10 years of repayments, and who often forgo higher wages in the private sector, can avoid a lifelong debt sentence."
The teachers union sued the Trump's first-term education secretary, Betsy DeVos, "and rogue loan servicers for their failure to administer the program—and we won," Weingarten noted. "This latest assault on borrowers' livelihoods is a cruel attempt to finish the demolition job that DeVos started. The goal is to sow chaos and confusion—separately, the PSLF application form has already been taken offline, making it effectively inaccessible."
The Economic Policy Institute pointed out Monday that "since the creation of the PSLF program, more than 1 million borrowers have received student loan forgiveness, largely due to fixes made under the Biden administration."
"More than 2 million individuals currently qualify for the PSLF program, according to the Department of Education," the think tank added. "The executive order could potentially narrow which organizations qualify for the program."
Student Borrower Protection Center executive director Mike Pierce blasted the order as "blatantly illegal and an all-out weaponization of debt intended to silence speech that does not align with President Trump's MAGA agenda."
"It is an attack on working families everywhere and will have a chilling effect on our public service workforce doing the work every day to support our local communities," Pierce warned. "Teachers, nurses, service members, and other public service workers deserve better than to be used as pawns in Donald Trump's radical right-wing political project to destroy civil society. This will raise costs for working people while doing nothing to make America safer or healthier."
In addition to scathing critiques, some groups threatened to challenge the order. Weingarten vowed that "the AFT won't stop fighting, in court and in Congress, until every single public service worker gets the help the law affords them."
Ament declared that "if the Trump administration follows through on this threat, they can plan to see us in court."
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GOP Lawmakers Move to Block Biden's Helping Hand to Student Loan Borrowers
"We condemn this move to block a plan that will provide significant financial relief to low-income borrowers and communities of color," said one advocate.
Sep 06, 2023
Just as the Biden administration announced this week that 4 million people have enrolled in its new income-driven repayment plan for student loan borrowers just two weeks after it was launched, Republican lawmakers in Congress announced plans to rip the debt relief away from Americans—saddling them with a continued financial burden that has left many working people unable to purchase homes, provide for a family, and save money.
Led by Sens. Bill Cassidy (R-La.), John Thune (R-S.D.), and John Cornyn (R-Texas), 17 Republican senators said Tuesday that they would use the Congressional Review Act (CRA), a tool members of Congress can invoke to overturn final rules set by federal agencies, to repeal the Saving on a Valuable Education (SAVE) plan.
The plan bases student debt monthly payments on borrowers' income and family size, allowing those who earn $15 per hour or less to avoid any monthly payment. An estimated 1 million people are expected to have no monthly payments under the plan and other borrowers are expected to save at least $1,000 per year compared with other income-driven repayment plans.
Education Secretary Miguel Cardona said Tuesday that Americans are submitting new applications for the SAVE plan each day "so that they, too, can take advantage of the most affordable student loan repayment plan in history."
"This is real money President [Joe] Biden is putting back into the pockets of working families," Cardona said last month when the program was launched. "And when borrowers struggle to make ends meet, we're not going to kick them while they're down."
But Republicans including Reps. Virginia Foxx (R-N.C.) and Lisa McClain (R-Mich.), who have introduced a companion bill to Cassidy's in the U.S. House, claim the program is "illegal" and will "leave mountains of debt at the feet of taxpayers while absolving millions of borrowers of their loans."
Jaylon Herbin, director of federal campaigns at the Center for Responsible Lending, said Wednesday that lawmakers should "oppose the CRAs to repeal SAVE."
"Senate Democrats will strongly oppose this Republican measure should it come to the floor for a vote, and we will stand with student loan borrowers as we continue to push for as much relief as possible."
"We condemn this move to block a plan that will provide significant financial relief to low-income borrowers and communities of color," said Herbin. "SAVE provides hope for borrowers as the administration continues to fight alongside advocacy groups to find other ways to achieve broad-based student loan relief. We continue to support President Biden in his quest to make our educational finance system fairer for all borrowers and oppose harmful legislation, such as these CRAs, that will set our already flawed student loan repayment system back to the pre-pandemic era."
Debt relief campaigners and legal experts have said for years that the Biden administration is legally able to wipe out student debt—going much further than the SAVE plan does—using the Higher Education Act of 1965, which allows the education secretary "to enforce, pay, compromise, waive, or release any right, title, claim, lien, or demand" related to federal student loans.
Republicans including Cassidy previously tried to block Biden's debt relief plan which would have canceled up to $20,000 in debt for some student loan borrowers, before the right-wing majority on the U.S. Supreme Court struck down the proposal.
The GOP announced its latest plan to stop borrowers from benefiting from the income-based repayment plan as the administration works on a broad relief plan under the Higher Education Act, and just days after interest on federal student loans began to accrue again following a pause that began during the coronavirus pandemic.
About half of student borrowers in a poll released by Life and My Finances said they would not be able to afford monthly payments when they resume next month.
While "Democrats work hard to find new ways to provide relief for borrowers in need," said Senate Majority Leader Chuck Schumer (D-N.Y.), "Republicans, instead of working with us to find a fix to our broken student loan system, immediately shoot them down."
"Republicans use the same old, tired excuse: that student loan relief only helps the few, the wealthy. That's utter nonsense," said Schumer. "President Biden's SAVE plan will benefit the Americans who need it most: working and middle-class families, students of color, community college students, and borrowers working in public service."
"Senate Democrats will strongly oppose this Republican measure should it come to the floor for a vote," he added, "and we will stand with student loan borrowers as we continue to push for as much relief as possible."
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House GOP Rebuked for 'Cruel and Reckless' Effort to Reverse Student Debt Relief
"Should this become law, it will cause irreparable damage to the student loan system and undermine Americans’ trust in their government," warned the head of the Student Borrower Protection Center.
May 24, 2023
Advocates of student debt relief on Wednesday blasted Republicans in the U.S. House of Representatives for passing a resolution that critics said showcases "their contempt for workers and families" who are burdened by loans taken out to access higher education.
H.J. Res. 45 is a Congressional Review Act (CRA) resolution, which U.S. lawmakers can use to overturn federal regulations. The measure passed the House in a 218-203 vote mostly along party lines; Democratic Reps. Jared Golden (Maine) and Marie Gluesenkamp Perez (Wash.) were the only members of their party to join Republicans in supporting it.
The resolution is unlikely to go anywhere in the Democrat-controlled Senate, and even if it did, the White House has already made clear that President Joe Biden would veto it. The GOP measure—a clear message to voters ahead of the 2024 elections—would block Biden's pending student debt cancellation plan and reverse already-delivered relief.
As Common Dreams reported Tuesday, the American Federation of Teachers and the Student Borrower Protection Center (SBPC) released a report detailing the "ruinous impact" the resolution would have on millions of borrowers.
"The record is clear: The damage caused by this cruel and reckless legislation will hurt working people, including millions of its right-wing supporters' own constituents," SBPC executive director Mike Pierce declared after the vote.
Pierce noted that "right-wing proponents have gone to great lengths to mislead their own colleagues and deny the truth—this effort would push hundreds of thousands of public service workers back into debt and require the government to charge tens of millions [of] borrowers for interest that has already been canceled."
"Should this become law, it will cause irreparable damage to the student loan system and undermine Americans' trust in their government," he warned. "This is exactly what extreme conservative lawmakers want, they are just afraid to say it."
SBPC and 260 other groups also criticized the resolution's supporters in a letter to congressional leaders earlier this month, charging that "policymakers now seeking to reverse such critical relief through the CRA are ignoring the economic needs of their own constituents and threatening our nation's financial security."
"Congress should be acting to improve the circumstances of the American people," the coalition argued, "not attempting to thwart the president's efforts to ease the financial pressure that so many are feeling."
Another letter signatory, the Center for Responsible Lending (CRL), called out the GOP-led effort just ahead of the vote Wednesday.
"This is yet another political stunt from some members of Congress to prevent tens of millions of borrowers, including low-wealth individuals, service members, public service workers, women, and people of color from receiving relief ahead of the Supreme Court's decision regarding the fate of student debt cancellation, said Jaylon Herbin, CRL's director of federal campaigns.
Herbin warned that "resuming the payment pause without student loan forgiveness, let alone requiring students to retroactively pay months' worth of student loan payments, will add thousands of dollars into the average borrower's loan balance, lead millions into forbearance and default, and contribute to a widening racial wealth gap.”
"These actions are not only irresponsible but demonstrate a genuine lack of concern for the nation's overall economic health and the financial well-being of millions of U.S. individuals and families," he added.
The House vote came not only as the U.S. Supreme Court considers a pair of right-wing challenges to Biden's debt relief plan, but also as congressional Republicans threaten to blow up the economy by refusing to raise the debt limit unless Democratic lawmakers and the president agree to spending cuts that would harm working people.
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