Fairness in Lending

Issue Background

In 2017, the Consumer Financial Protection Bureau (CFPB) released a rule in 2017, that would protect borrowers of payday and car title loans. But now, the CFPB wants to roll back on the most important protection: establishing that lenders cannot give loans out to people who could not afford to pay them back.

Payday loans are marketed as one time ‘quick fix’ consumer loans – for folks facing a cash crunch. In reality, these loans create a long term cycle of debt and a host of other economic consequences for borrowers.

Each year, 12 million Americans use payday loans to cover cash flow issues and they pay more than $9 billion in loan fees to do so. For many, these short term loans, lead them into a cycle of never-ending debt.

 

Help us, to stop keep this from happening.

Tell the CFPB that to protect consumers from the debt trap!

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What are payday loans?

Payday loans are marketed as one time ‘quick fix’ consumer loans – for folks facing a cash crunch. In reality, these loans create a long term cycle of debt and a host of other economic consequences for borrowers. Payday lenders charge 400% annual interest on a typical loan, and have the ability to seize money right out of borrowers’ bank accounts (Source: AFR).

 

What are car title loans?

Car title and installment loans are variations on the same theme. Car title lenders use a borrower’s vehicle as collateral for their unaffordable loans. Installment loans typically have longer payoff periods and replace slightly lower interest rates with expensive, unnecessary add-on products (Source: AFR).

 

Resources:

Payday Rule Repeal Plan

Center for Responsible Lending - Proposed Repeal of Payday Loan Rule: Overview & Initial Reaction

To learn more please visit, stopthedebttrap.org.