When MECEP joined a dozen nonprofit labor, business, senior, economic justice, and community organizations from Maine to call for stronger federal consumer protections against predatory payday lenders, we didn’t know we were enlisting in a movement!
But consumers from across the country poured out their stories to federal regulators about being fleeced by payday lenders. In fact, the Consumer Finance Protection Bureau (CFPB) received 425,000 public comments supporting a rule to crack down on financial abuses. In Maine, nearly 1,000 consumers posted comments through web portals that fed directly to the CFBP. The CFPB heard not only from consumers and consumer advocates but faith leaders, state attorneys general, members of Congress, and other elected officials.
The message to CFPB is clear: payday lenders devastate hardworking families, financially strain our communities, and deliberately target women, senior citizens, minority families, veterans and members of our armed forces, and other working poor families living on the brink.
We all need a quick infusion of cash now and then, to deal with a crisis or get us over a hump. But predatory lenders design payday loans to trap people in debt. A new report by the People’s Action Institute and Americans for Financial Reform shows how hard it is to get out of high-interest loan debt. Borrowers pay more in fees than their original loan was worth and take out loan after loan, on average as many as ten loans a year.
Now, the bureau is analyzing all the public comments it received and will draw on them to write a final rule. These real stories should guide CFPB in finalizing a payday lending rule that stops abusive lending practices once and for all.
