Woodstock Institute, Senator Durbin to Defend New Payday Loan Rule
FOR IMMEDIATE RELEASE: OCTOBER 13, 2017
CHICAGO, IL— U.S. Sen. Dick Durbin (D-IL) joined IL Sen. Jacqueline Collins (16th) (Chair, Senate Financial Institutions Committee), IL Rep. La Shawn Ford (8th) (Chair, House Financial Institutions Committee), and leading consumer advocates to voice support for the new national Consumer Financial Protection Bureau (CFPB) rule on payday and auto title lending.
The CFPB rule comes after years of efforts by consumer advocates, such as Illinois’ Woodstock Institute, Illinois Asset Building Group, Sargent Shriver National Center on Poverty Law, and Citizen Action/Illinois. While research shows over 70 percent, bi-partisan support for strong regulation of financial products such as payday loans, consumer advocates and elected officials are preparing to fight an industry-funded effort to block the rule.
“Payday lenders offer a quick way to make ends meet, but often with devastating consequences. Lenders are, in many instances, making these loans knowing that the consumer does not have the ability to repay them,” U.S. Senator Dick Durbin (D-IL) said. “I applaud the CFPB’s ruling and will continue to push for more comprehensive solutions to predatory lending practices, like my legislation to cap interest rates and fees for consumers.” Sen. Durbin has long championed a nationwide 36-percent interest rate cap on all loans. His bill, Protecting Consumers from Unreasonable Credit Rates Act, has support from a broad coalition of consumer advocates.
Sen. Durbin and his allies called for fierce opposition against any CFPB rule repeal efforts. The group anticipates a challenge under the Congressional Review Act (CRA), which had been employed only once before President Trump took office and began his assault on consumer protections; since then, it has been used a multitude of times to repeal various rules and regulations. A CRA repeal requires only a majority of votes in both houses; there is no filibuster option.
“Any narrative that suggests that repealing this rule is in the best interests of consumers is blatantly false,” said Brent Adams, Woodstock’s Senior Vice President of Policy. Adams wrote Illinois’ Payday Loan Reform Act, which became law in 2005, and formerly regulated the industry as Secretary of Financial and Professional Regulation from 2009 to 2012.
Sen. Durbin was joined by Sen. Jacqueline Collins (16th), Chair of the Senate Financial Institutions Committee, who said, “The CFPB rule is a big step forward but, as they say, there is no rest for the weary! Consumers will remain vulnerable to predatory lenders, so we must continue to be vigilant.”
“In the case of payday loans, access to credit can mean falling into a debt trap,” said Representative La Shawn Ford (8th), Chair of the House Financial Institutions Committee.
Woodstock Institute is a leading nonprofit research and policy organization in the areas of equitable lending and investments, wealth creation and preservation, and safe and affordable financial products and services. Woodstock Institute works locally and nationally to create a financial system in which lower-wealth persons and communities of color can safely borrow, save, and build wealth so that they can achieve economic security and community prosperity.