Strong Payday Lending Rule Needed
Consumer advocates from Arizona analyzed complaints about payday lenders from the CFPB database and what they found was a need to rein-in the worst abuses of a predatory industry.
Here’s a short summary of what they found:
The analysis of consumer complaints about predatory lending to the CFPB shows a critical need to rein in high-cost lending. The Arizona PIRG Education Fund analysis of written complaints to the CFPB found significant evidence of the major problem with predatory lending: Borrowers can’t afford these loans and end up trapped in a cycle of debt. 91% of written complaints were related to unaffordability, including abusive debt collection practices, bank account closures, long-term cycles of debt, and bank penalty fees.
Here are some concerns they raised:
The bad news is that as currently proposed payday lenders will be exempt from the ability-to-repay standard requirement for up to six loans a year per customer. To truly protect consumers from the debt trap, it will be important for the CFPB to close this and other loopholes. Otherwise, a weak rule will lend undeserved legitimacy to predatory products and practices and open the door once again for payday lenders to operate with impunity in our state.
You can take action today to send a message to the CFPB about the importance of a strong rule that protects consumers.
Remember, your support helps us keep fighting the loan sharks!
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