subota, 27. lipnja 2015.

Payday lenders prey specifically on those they know cannot afford to repay loans, building an entire business model around trapping people in a cycle of debt.


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CREDO action
Tell the consumer protection agency: Crack down on payday lenders.
Submit a public comment to the Consumer Financial Protection Bureau:
"Enact the strongest possible rules cracking down on exploitative payday lending, including preventing loans from being made to those who cannot afford to repay them, and closing loopholes that allow other forms of predatory lending."
Take action now ►
Dear STJEPAN,
Tell the Consumer Protection Agency: Crack down on payday lenders.
Payday lenders prey specifically on those they know cannot afford to repay loans, building an entire business model around trapping people in a cycle of debt.
That could be about to change. The consumer protection agency created by Senator Elizabeth Warren recently released draft rules on payday loans. Consumer groups quickly raised the alarm, warning of loopholes that would allow lenders to evade the rules and keep exploiting struggling Americans. But politicians and lobbyists friendly to predatory lenders still mounted an all-out assault, with a new report released this week. some Democrats, including Democratic National Committee Chair Representative Debbie Wasserman-Schultz, are lobbying against the new predatory lending rules.1,2
There is still time to close the loopholes and end the exploitation, and a group of Democratic senators is calling for just that – penning a letter demanding “the strongest rules possible.”3 We need to make sure the consumer protection agency gets the message and cracks down hard on predatory payday lenders.
The dirty secret of the payday lending industry is that there is no money in people repaying their loans on time. The key to the whole profit-making engine that makes lenders’ Wall Street backers rich is tricking people into taking out one loan and then locking them into months or years of debt. Charging hidden fees and demanding sky-high interest rates, payday lenders are little more than legal loan sharks.4
Earlier this year, the Consumer Financial Protection Bureau (CFPB) proposed disappointing new rules to rein in payday lenders. When it comes to mortgages, the CFPB demanded that lenders consider someone’s ability to repay before making a loan. But the agency’s draft rules gave payday lenders a choice between that prevention approach and simply offering borrowers new protections once trapped in debt. They also include massive loopholes, like failing to crack down on “auto title” loans and other forms of consumer lending. That’s simply not good enough.5
Senators Dick Durbin, Jeff Merkley, and Chris Coons recently joined more than two dozen of their colleagues in writing a letter to CFPB Chief Richard Cordray calling for the toughest possible rules, with no loopholes or special giveaways.6 With corporate Democrats and Wall Street allies already increasing their pressure on the CFPB to back down, it’s urgent that we echo the bold call for tough reforms.
Even though President Obama has spoken out against predatory payday lending, Representative Debbie Wasserman-Schultz, President Obama’s hand-picked choice to lead the Democratic National Committee, recently stood alongside Republicans to call on the CFPB to go easy on payday lenders – drawing fire from consumer groups in her own state.7,8 Other Democrats have taken the same stance, while Republicans are united in opposition to new rules and the payday lending industry is issuing reports with apocalyptic warnings of doom if the consumer agency implements sensible constraints on predatory lending.9
Desperate defenders of exploitative companies even claim that reining them in would lead Americans to turn to organized crime or underground loan sharks. The reality is that there are more payday lenders in America than McDonald’s and Starbucks combined, deliberately enticing people into taking out loans that they may not otherwise need with promises of cheap and easy cash now.10 The Consumer Financial Protection Bureau could weaken its draft proposal just as easily as strengthen it, so we need to speak out immediately.
Tell the consumer protection agency: Crack down on payday lenders. Click below to sign the petition:
Thank you for speaking out,
Murshed Zaheed, Deputy Political Director
CREDO Action from Working Assets
Add your name:
Take action now ►
  1. David Dayen, “The Government is Finally Cracking Down on Legal Loan Sharks” Fiscal Times, March 27, 2015.
  2. Kelly Riddell, “Obama-Elizabeth Warren payday lender rules slammed by Florida Democrats,” The Washington Times, June 17, 2015.
  3. Lydia Wheeler, “Dems demand 'strongest rules possible' for payday lenders,” The Hill, June 4, 2015.
  4. Dayen, “The Government is Finally Cracking Down on Legal Loan Sharks.”
  5. Ibid.
  6. Wheeler, “Dems demand 'strongest rules possible' for payday lenders.”
  7. Riddell, “Obama-Elizabeth Warren payday lender rules slammed by Florida Democrats.”
  8. Nicholas Nehamas, “Consumer advocates chide Florida congressional delegation over payday loans,” Miami Herald, June 3, 2015.
  9. Lydia Wheeler, “CFPB rules would decrease payday loan volume by 70 percent, report says,” The Hill, May 28, 2015.
  10. Dayen, “The Government is Finally Cracking Down on Legal Loan Sharks.”

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