Attack on consumers continues as Congress targets payday rule

Common-sense rule would help consumers stay out of devastating debt traps

 

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Washington, DC—Anti-consumer members of Congress are using the controversial Congressional Review Act (CRA)  in an attempt to kill yet another carefully crafted rule created by the Consumer Financial Protection Bureau (CFPB) to protect consumers from predatory lenders. More than 700 groups nationwide, including Consumer Action, have strongly supported the CFPB’s rule to protect consumers from short-term payday, auto title and other unaffordable loans that often carry 300% interest rates and trap consumers in an endless cycle of debt.

Congress used the same CRA tactic last month to repeal another critical rule that would have protected consumers’ rights to band together to sue companies that harm them.

“The bill’s backers claim that consumers need high-cost loans 'to make ends meet.' In reality, they need predatory loans like they need a hole in the head,” said Linda Sherry, Consumer Action’s director of national priorities.

Consumer Action is calling on both Democrats and Republicans in Congress to fend off the attack on the CFPB’s common-sense payday rule, which requires that lenders assess a borrower’s ability to repay a loan, and caps the number of costly short-term loans they can issue in a row to struggling borrowers. Click here to learn more about how the rule would benefit consumers.

Congress and the Administration’s battle to destroy the payday rule is part of a larger war to dismantle the consumer bureau. After CFPB Director Richard Cordray resigned last week (and appointed an acting director), President Trump sent in his own interim director, Mick Mulvaney, who notoriously called the CFPB a “sick, sad” joke. The authors of the Dodd-Frank Act have noted that they wrote the law with the precise intent to have the agency’s director appoint his temporary replacement.

 

Consumer Action (www.consumer-action.org) is a national nonprofit education and advocacy organization serving nearly 8,000 community based organizations with training, educational modules, and multi-lingual consumer publications since 1971. Consumer Action’s advocacy work centers on credit, banking, and housing, privacy, insurance, and telecom issues.

Tags/Keywords

cfpb, payday loans, padyay loan rule


 
 

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