House Members Must Protect TN Families from Loan Sharks

FOR IMMEDIATE RELEASE

December 4, 2017

Contact: Andy Spears 615.815.4544 or andy@tnca.org

House Members Should Defend New Rule Protecting Families from Payday Lenders

Tennessee families lose $400 million a year to payday predators

(Nashville, TN) — Ignoring the voices of families and communities who have worked for many years for relief from the harms of predatory payday lending, a handful of members of Congress have introduced a bill that would nullify an essential rule finalized by the Consumer Financial Protection Bureau last month.

A bill introduced by Rep. Dennis Ross (R-Fla.) and co-sponsored by Rep. Alcee Hastings (D-Fla.), Tom Graves (R-Ga.), Henry Cuellar (D-Texas), Steve Stivers (R-Ohio), and Collin Peterson (D-Minn.), would kill a long-awaited rule that requires payday and car title lenders to make loans only after they have assessed whether the borrower can afford to pay them back. This is a commonsense measure that is designed to protect people from being trapped in the high-cost loans that characterize the payday and car title industries.

“Our representatives in Congress are going to have to decide whether they stand with predatory lenders or the people of Tennessee, said Andy Spears, executive director of Tennessee Citizen Action.  “We have worked long and hard to see this rule come into being, and our families deserve the protection it affords. We have not come this far just to stand by and watch it be stripped away. We will fight very hard to keep this rule in place.”

A coalition of 700 civil rights, consumer, labor, faith, veterans, seniors and community organizations from all 50 states energized a years-long effort to push the Consumer Bureau for strong protections from predatory payday and car title lending. The business model relies on repeat borrowing of unaffordable loans; 75% of all payday loan fees are generated from borrowers stuck in more than 10 loans a year.

Payday and car title lending leaves people without funds to pay bills, strips them of their bank accounts, and increases their likelihood of bankruptcy. Across the country, payday and car title lending costs families $8 billion per year,

The practice costs Tennessee families more than $400 million per year in fees for loans with interest rates that average more than 400% annual interest.

The Consumer Bureau’s rule is supported by more than 70% of Republicans, Independents and Democrats.

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