In February 2019, the current Consumer Financial Protection Bureau (CFPB) Director Kathy Kraninger released a plan to repeal a common sense rule that was created to help stop payday and car title loans from trapping people in long cycles of debt and reborrowing. This rule is a vital element of the 2017 CFPB rule which requires lenders to determine a borrower’s ability to repay a loan before the loan can be issued.
Many people turn to payday and car title loans in times of financial hardship. However, instead of helping in a time of need, these loans trap vulnerable borrowers in short-term high-interest rate loans that are deliberately unaffordable. In fact, according to the CFPB, 80 % of new loans are taken out to cover the cost of the initial loan. This cycle of reborrowing causes many borrowers to stay trapped in debt for months, sometimes years.
Click here to read testimonies of people who have been victims of payday loans.
Rescinding this rule will leave millions of Americans without protection against these predatory lending practices particularly people of color, those with low-income, and veterans.
In 2006, the PC(USA) General Assembly passed a resolution entitled “A Reformed Understanding of Usury for the 21st Century,” which highlighted the immoral practices of the payday lending industry. As people of faith and conscience, we must speak out against these injustices. Throughout the Gospels, Jesus continuously condemned the oppression and marginalization occurring in society. As the hands and feet of Jesus, we must do the same and stand up against this exploitation of the poor and disenfranchised.
Take Action Now and submit a comment to the CFPB letting them know that rescinding a critical element of this rule will harm millions of Americans.
The proposed rule change is currently open for public comment until May 15, 2019. Make sure to prepare your comment and then visit the federal register comments page. The CFPB is legally required to consider public comments. Let your voice be heard and submit your comment today!
A sample comment can be found here.
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