News Intro Text
National Payday Rule Could Save Louisiana Consumers Millions But Proposed Rule Still Needs Strengthening
Date
News Item Content
<p>National Payday Rule Could Save Louisiana Consumers Millions But Proposed Rule Still Needs Strengthening </p>
<p>June 2, 2016</p>
<p>“Today, the Consumer Financial Protection Bureau unveiled a proposal for a new national rule on payday and car title lending that has the potential to save Louisiana residents millions if changes are made before the rule is finalized,” Fr. Fred Kammer, SJ, JSRI’s Executive Director said.</p>
<p>“The Consumer Financial Protection Bureau’s proposed rule on payday and car title lending is a good beginning, but there is still much work to be done to ensure this rule truly protects consumers from the legalized loan sharks who prey on our communities,” Fr. Kammer said. “Fortunately, this is just the opening offer. Our community will be working hard over the next few months to help the CFPB understand the importance of closing loopholes in what is otherwise a well thought out proposal. In doing so, they can shut the debt trap once and for all.” </p>
<p>Payday and car title loans with interest rates that average 391 percent drain $241.5 million in fees annually from the pockets of Louisianans who can least afford it, according to a report by the Center for Responsible Lending. </p>
<p>“This type of lending exploits those in need and our Catholic tradition warns against such modern day usury,” said Fr. Kammer. “Our U.S. Catholic bishops already have expressed to Congress the need to protect low-income families from extremely onerous interest rates and fees as in payday loans.”</p>
<p>Accordingly, JSRI and advocates around the country have been pushing for a federal rule that simply requires these lenders to do what any responsible lender does already – to determine whether a borrower is likely to be able to pay back the loan, without defaulting on basic necessities like rent and groceries, and without immediately taking out another loan. </p>
<p>While the CFPB rule does create such an affordability standard, the rule also allows for many exemptions and leaves open too many loopholes to meaningfully reduce the harm of predatory lending. A more detailed analysis of what works and what does not about the CFPB’s proposal is available <a href="http://stopthedebttrap.org/wp-content/uploads/2016/06/stdt_payday_proposed_rule_works_jun2016.pdf">HERE</a>.</p>
<p>The CFPB will be seeking comments from the public until September 14, 2016, after which they will review before making the rule final in 2017. In the meantime, consumers are encouraged to comment and suggest changes to the final rule that will close loopholes and remove exemptions. Comments can be offered at <a href="http://www.stoppaydaypredators.org">www.stoppaydaypredators.org </a></p>
<p><a href="https://jsri.loyno.edu/sites/loyno.edu.jsri/files/JSRI Payday Rules Statement.pdf">FULL STATEMENT >></a></p>
<p>June 2, 2016</p>
<p>“Today, the Consumer Financial Protection Bureau unveiled a proposal for a new national rule on payday and car title lending that has the potential to save Louisiana residents millions if changes are made before the rule is finalized,” Fr. Fred Kammer, SJ, JSRI’s Executive Director said.</p>
<p>“The Consumer Financial Protection Bureau’s proposed rule on payday and car title lending is a good beginning, but there is still much work to be done to ensure this rule truly protects consumers from the legalized loan sharks who prey on our communities,” Fr. Kammer said. “Fortunately, this is just the opening offer. Our community will be working hard over the next few months to help the CFPB understand the importance of closing loopholes in what is otherwise a well thought out proposal. In doing so, they can shut the debt trap once and for all.” </p>
<p>Payday and car title loans with interest rates that average 391 percent drain $241.5 million in fees annually from the pockets of Louisianans who can least afford it, according to a report by the Center for Responsible Lending. </p>
<p>“This type of lending exploits those in need and our Catholic tradition warns against such modern day usury,” said Fr. Kammer. “Our U.S. Catholic bishops already have expressed to Congress the need to protect low-income families from extremely onerous interest rates and fees as in payday loans.”</p>
<p>Accordingly, JSRI and advocates around the country have been pushing for a federal rule that simply requires these lenders to do what any responsible lender does already – to determine whether a borrower is likely to be able to pay back the loan, without defaulting on basic necessities like rent and groceries, and without immediately taking out another loan. </p>
<p>While the CFPB rule does create such an affordability standard, the rule also allows for many exemptions and leaves open too many loopholes to meaningfully reduce the harm of predatory lending. A more detailed analysis of what works and what does not about the CFPB’s proposal is available <a href="http://stopthedebttrap.org/wp-content/uploads/2016/06/stdt_payday_proposed_rule_works_jun2016.pdf">HERE</a>.</p>
<p>The CFPB will be seeking comments from the public until September 14, 2016, after which they will review before making the rule final in 2017. In the meantime, consumers are encouraged to comment and suggest changes to the final rule that will close loopholes and remove exemptions. Comments can be offered at <a href="http://www.stoppaydaypredators.org">www.stoppaydaypredators.org </a></p>
<p><a href="https://jsri.loyno.edu/sites/loyno.edu.jsri/files/JSRI Payday Rules Statement.pdf">FULL STATEMENT >></a></p>