Rep. Sewell responds to proposed CFPB Regularions for Payday Loan Industry
Congresswoman Terri Sewell recently joined stakeholders in a press conference call to discuss proposed regulations by the Consumer Financial Protection Bureau (CFPB) to stop the predatory practices of payday and auto title loan lenders.
“Today, I joined with Southern Poverty Law Center and other Alabama stakeholders to support efforts by the CFPB to propose new federal rules to rein in payday lenders who prey on millions of Americans that fall victim to the cycle of debt.
“When President Obama visited Birmingham in March 2015 to announce CFPB’s efforts to address predatory lending practices, he noted that there are four times as many payday lenders in Alabama as there are McDonalds. This illustrates the critical need for stronger consumer protections to fight against unfair and abusive lending practices.
“Minorities are disproportionately affected by the cycle of long-term debt from these under-regulated lenders. African-American and Latino communities are especially impacted by the predatory lending practices of payday loans, vehicle title loans, and check advance loans marketed as easy access to fast cash. These types of loans specifically target financially vulnerable communities where residents have limited access to traditional bank loans or credit. Predatory lending compromises the financial security of millions of Americans–it’s a problem that’s too big to ignore. Further restrictions and regulations are necessary right now.
“The CFPB’s proposed rules as announced today would require lenders to offer affordable loan payments based on income and personal expense. The proposed regulations would require lower costs and reasonable durations of time to repay loans. Likewise, limiting the ability of lenders to access borrowers’ checking accounts through ACH is also an important commonsense reform. Borrowers should not be at the mercy of predatory lenders and CFPB’s proposed rules would strengthen consumer protections and make it harder to prey on vulnerable communities.
“The proposed CFPB rules have bipartisan support and empower consumers to make better financial decisions for themselves. During the ninety-day comment period, I encourage Alabamians to share their stories of the impact of payday loans and to urge the CFPB to adopt these much needed reforms. I strongly support the adoption of these proposed regulations and will continue to fight for greater consumer protections in my role as a member of the House Committee on Financial Services.”