Access to Credit or Access to Debt?

Under New Leadership Consumer Financial Protection Bureau Caves to Loan Sharks, Reopens Historic Payday Protections




PRESS CONTACTS: Brent Adams ( or Jenna Severson (

CHICAGO, IL – The Consumer Financial Protection Bureau today issued a Notice of Proposed Rulemaking that aims to crumble the Bureau’s historic protections against predatory payday and auto title lending. The original rule, issued in 2017 under Director Richard Cordray, established common-sense consumer protections, such as ability-to-pay provisions that require a lender to determine if a borrower can afford to repay the loan without falling into debt. Today, citing a need for “access to credit,” Trump-appointed Director Kathy Kraninger is moving the Bureau in the exact opposite direction by withdrawing the heart of the rule: the ability-to-pay provisions.


“The original rule was created after years of research with the sole purpose to keep families from financial ruin. The ability-to-pay provisions are obvious protections for consumers who too often are trapped in short-term, high-cost loans that require them to re-borrow or skimp on basic necessities, such as food, heat, or medical bills,” said Woodstock Institute President, Dory Rand, who pointed to the Consumer Bureau’s own research showing four of every five loans are re-borrowed within the month. “We implore Director Kraninger to consider the dangerous consequences of this reversal on the most financially vulnerable.”


“In terms of payday loans, ‘access to credit’ is a pleasant-sounding smoke screen for ‘access to a never-ending debt trap with a triple-digit interest rate!’” said Brent Adams, Senior Vice President of Policy and Communication for Woodstock Institute, who wrote the State’s first payday loan law in 2005, and regulated the industry as Secretary of Financial and Professional Regulation from 2009-2012. “We ought to be protecting people, not guiding them down the path toward financial ruin.”

In Illinois alone, predatory payday and auto title lending costs families over half a billion dollars per year in abusive fees and usurious rates. Most Illinois borrowers make an average of less than $30,000 a year and cannot afford to repay loans at an average 323 annual percentage rate.


A 2016 blog by Kevin Herrera at the Sargent Shriver National Center on Poverty Law tells the story of borrower who turned to a payday lender when her car was booted. Her $300 loan carried a 435-percent interest rate that, as designed, caused her to re-borrow until she had over 25 loans and over $15,000 of debt. The payday lender’s promise of quick cash left this borrower in a far worse financial situation than when she started and without means to pay her medical bills.


Regardless of political party, Americans are unified in their disdain for predatory lending. A 2018 poll of likely voters shows more than 82 percent of Republicans, Independents, and Democrats support the Consumer Bureau’s Payday Rule. Earlier last year, no single member of the Illinois Congressional delegation—Democrat or Republican– opted to sign on to legislation repealing the rule. Senator Durbin, who stood with Woodstock in 2017 when the rule was released, has led his colleagues in warning the Consumer Bureau to not undo the rule, and long championed the Protecting Consumers from Unreasonable Credit Rates Act, which would cap the interest rate on all consumer loans at 36 percent.


Woodstock Institute will submit comments to the Consumer Financial Protection Bureau about the payday rule, and encourages its allies and concerned consumers to do so.