Stopping the Debt Trap
Tennessee Citizen Action joined with consumer advocacy groups across the nation to push the Consumer Financial Protection Bureau to adopt a strong rule to rein-in payday and car title lenders.
That action is drawing attention. A recent story in American Banker notes:
“The very nature of this business depends on people borrowing and then re-borrowing and racking up more fees. That is bad enough, but what is just as troubling is the way these loans have been aggressively marketed in communities of color and other vulnerable population’s including older Americans who rely on social security,” said Rob Randhava, senior counsel at the Leadership Conference on Civil and Human Rights.
There’s evidence that the proposed rule, if adopted, would lead to a significant drop in the availability of payday and car title loans:
The CFPB estimates that the payday loan proposal, which also covers auto title lenders, will reduce payday loan volume by 60% to 70%.
That’s good news for Tennessee families, who lose more than $400 million a year in fees to these legalized loan sharks.
For more on payday lending and how you can help stop the debt trap, follow @TNCitizenAction