On Thursday, March 26th the CFPB went to Richmond, VA, to hold a field hearing and release a first look at its potential plans to regulate payday, installment and car title loans. The draft proposal is broad in scope and holds at its core the importance of an “ability to repay” standard. Count up two big wins for the advocacy community! But the proposal also contemplates dangerous exceptions to the meaningful application of the ability to repay principle. We’ll be working hard to push the CFPB to close the loopholes as this process moves forward. Groups from around the country both applauded the progress the CFPB is taking on the issue and highlighted the importance of strengthening the rule.
At the hearing, CFPB Director Richard Cordray, Virginia Attorney General Mark Herring, and panelists from Virginia Poverty Law Center, Center for Responsible Lending, The Leadership Conference on Civil and Human Rights and California Reinvestment Coalition all stressed the need for a strong rule that will #stopthedebttrap. “CFPB can have tremendous impact in protecting borrowers from dangerous loans,” said Mike Calhoun of Center for Responsible Lending. He continued, “So it’s critical that CFPB’s rule address payday installment loans, and also that states remain vigilant in applying state usury limits to these loans.”
Beforehand, more than 80 advocates and allies gathered at the Richmond Convention Center for a press conference and community meeting, and during the hearing more than 30 people – borrowers, faith leaders, state and national advocates, consumer lawyers, and others – testified in favor of a strong payday rule.
Thanks to all who attended, spoke, tweeted, retweeted, selfied, and thunderclapped to get our #stopthedebttrap message out! Click here to see the Storify from the event, which features tweets posted on the day of the hearing.
Thursday was a big day for predatory lending reform as President Obama also took up the issue during his visit to Birmingham Alabama. He spoke about the dangers of predatory lending, “You borrow money to pay for the money you already borrowed,” the President said, aptly describing the way most payday loans play out. “… If you take out a $500 loan, it’s easy to wind up paying more than $1,000 in interest and fees.” The President also participated in a roundtable meeting on the subject of payday loan reform with community leaders. Click here to view video of the President’s remarks on the need to protect consumers from predatory lending practices.
Click here to check out the full range of national and local press from the Richmond & Alabama events.
– Gynnie Robnett