The Consumer Financial Protection Board needs to hear from you by tonight about strengthening its new rules governing predatory lending, which mostly afflicts low-paid workers. Make yourself heard, right here, asks Sen. Elizabeth Warren.
/By Elizabeth Warren/ When the economy crashed just months before President Obama took office, financial institutions had targeted low- and middle-income American families with loans loaded with tricks and traps -- loans that helped drive the worst financial crisis since the Great Depression.
President Obama established the Consumer Financial Protection Bureau (CFPB) to protect ordinary Americans from being cheated on mortgages, student loans, credit cards, and other financial products -- and I'm proud of the work we did together to make that happen.
We've come a long way since 2008, but there's a lot more to do to make sure American families aren't put at risk by bad actors in the financial system. That's why the CFPB is working on long-awaited rules to rein in payday lenders, and they need your support before the deadline for comments tomorrow night.
Tell the Consumer Financial Protection Bureau by tomorrow's deadline that you support tough rules to stop debt traps once and for all.
If you've ever been in the scary position where you have to live paycheck to paycheck and suddenly had an accident or emergency, you may know just how devastating these short-term, high-cost loans can be -- and just how impossible it can be to be free of them.
Payday lenders that build business models around trapping people in a never-ending cycle of debt are throwing bricks to a drowning man.
To begin with, payday loans are unbelievably expensive, because lenders know those who come to them are desperate. Some payday loans can have an annual interest rate that exceeds 300 percent. That means that people who need small loans often end up paying way more in interest than the amount they borrowed -- and what's worse, they have to take out more loans to repay it.
But it's more than the interest rates. The loans are set up to trap people into a cycle of borrowing, keeping them in debt for months or even years.
The CFPB isn't getting rid of small dollar loans, but it is outlawing the most abusive practices -- and that cuts into profits. I guess it's no surprise that the billion-dollar payday lending industry is throwing everything it has against it.
By law, the CFPB must consider comments before making the rule final. The payday lenders are getting their comments in. How about you? Can you let the CFPB know how you feel about a tough payday lending rule?
The deadline is tonight. You can help shut down these predatory practices with strong rules -- submit a comment to the CFPB today:
Elizabeth Warren (D-Mass.) is a member of the US Senate.