Oregon Lawmakers Urge Stronger Payday Lending Protections
WASHINGTON, DC [10/13/16] – Senators Ron Wyden and Jeff Merkley and Representatives Peter DeFazio, Earl Blumenauer, and Suzanne Bonamici urged the Consumer Financial Protection Bureau (CFPB) to protect families and consumers with strong rules against predatory payday lending practices.
The CFPB is currently finalizing a rule on payday, vehicle title, and certain high-cost installment loans. As the Bureau makes its final considerations, the lawmakers asked the CFPB to require all lenders to consider a borrower’s ability to repay before making a loan, address the abusive practices of lead generators in disseminating consumer information to payday lenders, and require all payday lenders to register with the CFPB to ensure they are following state and federal laws.
“The rulemaking is an important step in protecting consumers from predatory payday lenders and we encourage the CFPB to continue to work with stakeholders to craft a strong final rule that protects families across the country,” the lawmakers wrote. “In Oregon, existing consumer protection laws are in place that cap interest rates on payday loans to 36 percent plus origination fees and prohibit more than two renewals on an existing loan. Although these protections have saved many Oregonians from falling further into the cycle of debt, there is much more that can be done to prevent vulnerable borrowers from incurring unsustainable debt with unfair terms that will be difficult, or even impossible, to repay.”
You can read the lawmakers’ full letter to the CFPB here.
Earlier this year, Senator Merkley and Representative Bonamici introduced the Stopping Abuse and Fraud in Electronic (SAFE) Lending Act of 2016 to protect consumers from predatory lending practices and crack down on some of the worst abuses in the industry. The bill allows consumers to stop automatic bank withdrawals from payday lenders, requires that lenders abide by the laws of the state in which they are lending, and bans third party “lead generators” that collect applications and auction them to payday lenders.