Will Members of Congress Support CFPB’s Proposed Rule to Rein in Predatory Payday Lenders?
Allied Progress: CFPB’s New Payday Lending Rules a “Good Start”
WASHINGTON, DC – Today, the Consumer Financial Protection Bureau’s (CFPB) announced a proposed rule to rein in some of the worst abuses of predatory payday and car title lenders. In a statement, Allied Progress praised the effort but encouraged the Bureau to take advantage of this historic opportunity by removing potential loopholes and further strengthening protections for consumers. The organization also called on members of Congress to announce whether they support or oppose the rule.
“While this is a good start and an important step in the right direction, the fight is far from over. Payday lenders have spent millions of dollars currying favor with powerful Washington politicians and they will do whatever it takes to keep this extremely lucrative predatory racket humming along. We owe it to hard working men and women everywhere to remain vigilant and fight on until the debt trap is ended once and for all. That is why the CFPB should take this opportunity to remove potential loopholes and further strengthen consumer protections in its proposed rule,” said Allied Progress executive director Karl Frisch.
He continued, “It’s time for our Representatives in Congress to speak up and let us know where they stand. Do they support the CFPB’s proposed rule, or not? Will they champion the needs of their constituents and those caught in the payday lending debt trap or that of the predatory lenders who fill many of their campaign bank accounts?”
Many advocates say the CFPB’s current proposed rule is on the right track but because of loopholes and industry exemptions it may still continue to let too many people fall victim to the payday lending debt trap.
The proposed rule will be finalized in approximately 90 days. In the meantime, consumers are encouraged to comment and suggest changes to the final rule that will close loopholes and remove industry exemptions. Comments can be offered at StopPaydayPredators.org. Further underscoring the importance of real Americans making their voices heard, this spring payday lenders were accused of sending boxes of fake letters to Arizona lawmakers who were considering payday lending legislation at the time. Additionally, the shady anti-CFPB astroturf group Protect America’s Consumers, which has spared no expense attacking the Bureau in the months leading up to the proposed rule announcement, is run be individuals and entities that were once involved in an advocacy campaign that was caught sending forged grassroots letters to Congress.
Additional Background
Since last year, Allied Progress has been among those leading the fight to hold the payday lending industry and its powerful allies in Congress accountable. Last September, the organization released a report detailing how a dozen members of Congress were showered with tens of thousands of dollars in payday lender campaign cash within days of taking official actions to benefit the industry. Allied Progress also helped expose the title lender with a shady past who has spent millions of dollars on a pro-payday lending industry ballot measure in South Dakota. For several months, the organization has led rapid response efforts targeting the daily spin and misinformation from the payday lending industry and its allies at think tanks and in Congress.
In March, Allied Progress launched its payday congressional accountability campaign with a television ad targeting Rep. Debbie Wasserman Schultz in her South Florida district and an online petition at DebtTrapDebbie.com calling on her to “stop sabotaging President Obama’s hard work to hold payday lenders accountable.” The organization noted that Wasserman Schultz has received more than $68,000 in contributions from the industry while in Congress and is co-sponsoring a bill that would delay protections for borrowers while paving the way for payday lenders to continue preying on vulnerable Americans. In April, Allied Progress sponsored two billboards in Wasserman Schultz’s district and a mobile billboard in the nation’s capital. She has been aggressively challenged on her payday lending stance in local and national media subsequent to the campaign’s launch. On Tuesday, Allied Progress announced another $100,000 ad buy in South Florida designed to hold Wasserman Schultz accountable for her continued support of the payday lending industry. Earlier this month, Allied Progress released a report detailing how Florida’s political establishment had received more than $2.5 million from payday lenders since 2009. Just last week, the organization released a scathing mini-doc on the “Florida model” of payday lending and began polling its members to help decide which payday lending ally in Congress it should expose next: Alcee Hastings or Patrick Murphy.
In addition to holding key Washington decision makers accountable, Allied Progress has led the fight to expose and hold accountable industry-aligned and deceptively named astroturf front groups like “Protect America’s Consumers” and “Floridians for Financial Choice” that have sought to defend payday lenders and other predatory industries from CFPB regulation.
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Allied Progress uses hard-hitting research and creative campaigns to hold powerful special interests accountable and empower hardworking Americans.