Once Again, Trump Administration Puts Profit before People, Ignores Needs of Most Vulnerable
CFPB’s Stalled Payday Loan Protections and HUD’s Decision to Change Fair Housing Safeguards Threaten Consumers and Communities of Color
FOR IMMEDIATE RELEASE: August 19, 2019
PRESS CONTACTS: Jenna Severson (o) 312-368-0310 (firstname.lastname@example.org)
CHICAGO, IL – Today, the Trump Administration took another major step backward, changing course on lending policies that could widen the racial wealth gap. Housing and Urban Development (HUD) announced a proposal to change its Disparate Impact rule, which is intended to root out discrimination in lending under the Fair Housing Act. This happens on the same day that historic and strong protections against predatory consumer lending by the Consumer Financial Protection Bureau (CFPB) were scheduled to go into effect, but did not.
If adopted, today’s proposal by HUD will make it more, not less, difficult for people of color to combat housing policies and practices that have a disparate impact on them. HUD, under the leadership of Secretary Ben Carson, has erected additional barriers to people seeking to challenge discriminatory policies and practices.
“This move would protect and perpetuate the structural racism that has long existed in our nation’s housing system, preserving the effects of decades of redlining and discrimination. Absent affirmative steps to correct such disparities, they will continue, and Black and Brown people will continue to find it harder than White people to access quality, affordable housing,” said Woodstock Institute Senior Vice President of Policy & Communication Brent Adams.
In more bad news for consumers, the CFPB’s 2017 payday lending protections did not go into effect today. The Bureau’s February 6, 2019, decision to reopen the historic payday rule threatens those who are most vulnerable to high-interest, short-term loan products offered by payday and auto title lenders.
To track the amount of money American consumers lose in fees and interest to payday and auto-title loan sharks, the Stop the Debt Trap coalition—of which Woodstock Institute is part— launched the Payday Loan Debt Trap Tracker. In a press release, the coalition claims a conservative measurement of the payday loan debt trap drains consumers of almost $6.4 billion in fees annually, or $213 per second. CFPB Director Kathy Kraninger introduced a proposal in February to gut the protections, then to block them from taking effect today.
“The debt trap tracker counts money loan sharks snatched from the pockets of hard-working consumers,” said Dory Rand, president of Woodstock Institute in a Stop The Debt Trap Coalition press release. “Calling on CFPB Director Kathy Kraninger to rein in financial predators with strong consumer protections should not be controversial when consumer protection is the central purpose—and name—of the agency she leads.”
Together, the two actions have Woodstock Institute and its allies wondering what is happening in Washington, D.C., and why the Trump Administration does not prioritize fair lending, civil rights, and racial equity.