February 8, 2019
Media contact: National Consumers League – Carol McKay, email@example.com, (412) 945-3242 or Taun Sterling, firstname.lastname@example.org, (202) 207-2832
Washington, DC—This week, the Consumer Financial Protection Bureau (CFPB) moved to gut its payday lending rule, which was scheduled to go into effect later this year. The agency, now led by Director Kathy Kraninger, is reversing a rule that would have protected consumers from predatory auto title and payday lenders and require them to only lend money to consumers who can afford to repay the loan.
The following statement is attributable to Brian Young, Public Policy Manager of the National Consumers League:
“Assessing a borrower’s ability to repay before making a loan is common sense. Whether a consumer is applying for a mortgage or borrowing to pay the electric bill, no one should be given a loan that they cannot possibly pay back. CFPB’s rollback of a rule that would require assessment of a borrower’s ability to repay is indefensible.
“The CFPB’s own data found that 4 out of 5 consumers who take out payday loans with interest rates in excess of 400 percent either default or take out additional short-term loans. A 400 percent interest rate loan is not a lifeline; it is a textbook example of exploitation. The CFPB’s mandate is to protect consumers, not the interests of a predatory industry. The CFPB should do its job and refrain from repealing this critical consumer protection.”
About the National Consumers League
The National Consumers League, founded in 1899, is America’s pioneer consumer organization. Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. For more information, visit www.nclnet.org.