Why is This Minnesota Democrat Attempting to Sabotage Obama’s Payday Lending Rule?
WASHINGTON, D.C. – Just in time for the holiday season, Minnesota Democratic Congressman Collin Peterson is joining Republicans in Congress and selling out his constituents by co-sponsoring legislation to repeal the Consumer Financial Protection Bureau’s payday lending rule. This affront to President Obama’s legacy would only hurt Minnesotans struggling to get out of the cycle of debt caused by predatory payday lending practices.
“Consumers shouldn’t have to worry about debt collectors and predatory payday lenders when they’re trying to enjoy the holidays with their families. Unfortunately, Minnesotans can’t rely on Rep. Peterson to protect them. If he is successful in undermining this key accomplishment of President Obama and the CFPB, he will allow predatory payday loan practices to continue in Minnesota unabated,” said Karl Frisch, executive director of Allied Progress.
He continued, “It took years to establish these protections, and Peterson and his industry-backed friends in Congress have stood in the way at every turn. Enough is enough. What will it take for Peterson to do his job and stand up for his constituents?”
Minnesota has seen a drastic increase in the number of payday loans issued in the state, in fact from 2007 to 2012, the number of loans DOUBLED, reaching 381,000. While Minnesota’s Consumer Small Loan Act only allows short-term loans up to $350 and fees and interest equaling no more than $26, lenders are using the Industrial Loan and Thrift (ILT) loophole to be licensed as ILTs and charge far higher fees. In 2012, 75 percent of payday loans were made to loophole ILT lenders.
According to Center for Responsive Politics, Peterson has received $8,000 from the payday lending industry. That could explain why he has no interest in fighting for Minnesota consumers wronged by payday lenders.
Allied Progress launched PaydayLendingFacts.org to expose the payday lending industry, combat misinformation, and provide the public with the truth about payday lenders and their allies in Congress. The website features hundreds of pages of easily accessible research.
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