WASHINGTON, D.C. — While over 20 million Americans have lost their jobs amid a worsening recession, the payday loan industry appears to be thriving as it skirts state usury protections to target vulnerable families online with triple-digit interest rates. An analysis by consumer watchdog Allied Progress shows leading payday lending companies are enjoying a massive uptick in profits during the pandemic as they trap more Americans in endless cycles of debt. This comes as the Trump Consumer Financial Protection Bureau confirmed its intention to finalize its proposed small dollar lending rule in the coming days, which is expected to permanently gut a critical protection against the payday debt trap, the ability-to-repay standard.
“In the midst of one of the worst economic periods in American history, predatory lenders are thriving on the backs of the most vulnerable consumers,” said Derek Martin, director of Allied Progress. “The more families are saddled with high-interest debt, the longer it will take for the economy to recover – full stop. There could not be a worse time for the Trump CFPB to reward predatory lenders with even greater license to take advantage of consumers with abusive 400 percent interest loans. The Trump CFPB needs to get its priorities straight during the Trump recession, and that means finally putting consumers before the President’s wealthy payday industry donors.”
WHAT YOU NEED TO KNOW [SOURCES]:
- World Acceptance Corporation—Which Has Been Investigated For “Breaking Federal Laws” With Its Loan Practices—Posted Over $23 Million In Profits Over The First Three Months Of 2020, An “Earnings Surprise” Of Over 25% As It Ramps Up Its Online Lending During The Pandemic.
- A ProPublica Investigation Found That World Acceptance Corporation’s “Loans Are Deceptively Expensive And Often Trap Borrowers In A Cycle Of Debt.”
- FirstCash—A “Leading” Pawn Lender—Reported Its Cash Flows “Remain Very Strong,” Planned On Handing Out Millions In Shareholder Dividends, And Added 67 Locations In The First Three Months Of 2020.