Regulate Payday Predators

Nearly 100 organizations representing low-income housing providers, food pantries, seniors, mental health and addiction services agencies and churches recently called on federal Consumer Financial Protection Bureau today to issue tough rules on predatory payday lending.

The letter, coordinated by COHHIO, comes as the CFPB is considering issuing national regulations on high-interest, low-dollar consumer loans that are designed to trap consumers in a cycle of debt where borrowers resort to taking out new loans to pay off old ones. The CFPB sought input on the rules through Oct. 7 and is expected to issue final rules in 2017.

While the draft rules are a good start, COHHIO and other advocates have voiced concern about several weaknesses that could allow borrowers to skirt the requirement for lenders to assess a borrower’s ability to repay and inadequate limits on refinancing, or loan flipping.

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