WASHINGTON, DC — Yesterday, the Consumer Financial Protection Bureau (CFPB) announced plans to do away with tougher payday loan restrictions that were developed during the Obama Administration but that weren’t scheduled to take effect until later this year. The new regulations would have limited the number of consecutive loans given, while also requiring lenders to do their due diligence to make sure borrowers have the means to repay the loans and meet their living expenses.
Jesse Van Tol, CEO of the National Community Reinvestment Coalition (www.ncrc.org), made the following statement:
“This is a shameful step backwards for an agency that was supposed to protect vulnerable consumers from abusive lenders.
“High-cost payday loans can trap consumers in a spiral of debt. We were hopeful that these new rules would help end that cycle and get rid of this destructive lending practice. Instead, this administration wants to turn its back on consumers. It’s listening to shady lenders who profit from shady practices that are devastating for poor people.
“We need to ensure that all neighborhoods and communities have access to safe, responsible basic banking and lending services and that they are protected from abusive loans from financial predators. Yesterday, the CFPB moved in the complete opposite direction.”