Advocates Rally for Payday Loan Reforms as part of “Shark Week”
San Francisco, CA, August 13, 2014-Consumers, youth leaders and advocates are staging a demonstration at a Check ‘N Go storefront in downtown San Francisco today to raise awareness about a unique breed of sharks –financial predators offering payday loans – as part of the Discovery Channel’s “Shark Week.” The store islocated at 1218 Market Street in San Francisco and the rally begins at 11AM with consumers sharing their stories.
The CFPB will begin writing payday loan rules in early 2015, and advocates are urging the federal Consumer Financial Protection Bureau (CFPB) to implement strong consumer protection rules to end the payday loan debt trap. Research indicates most payday loan consumers end up in long-term debt after taking out their first payday loan, typically using 10 payday loans a year. Consumers who have struggled with payday loan debt or who have been harassed by payday loan collectors are encouraged to file complaints and share their stories with the CFPB via their website: www.consumerfinance.gov.
Community groups have been campaigning for local and statewide reforms for over a decade, resulting innumerous California cities adopting restrictive land use measures to restrict the growth of payday loan stores.Despite local leaders taking action, the California state legislature has failed to enact any consumer protections.
“Our state Senate and Assembly have repeatedly rejected payday loan reform proposals that would rein in payday loan abuses,” explains Liana Molina, an organizer with the California Reinvestment Coalition. “People think these loans will help them stretch their paychecks. Instead, they find themselves in an endless cycle of renewing their original loans and paying hundreds of dollars in fees as a result.”
“We’re calling on the payday loan industry to end their attacks against working people, and for the CFPB to do what our state has failed to do: end the debt trap,” says Michael Hampton, a leader of Community Housing Partnership’s Community Organizing Resident Engagement program.
Representatives at today’s rally are from: The California Reinvestment Coalition (CRC), Community Housing Partnership’s Community Organizing Resident Engagement (CORE) tenant leaders, Youth Leadership Institute(YLI) and Mission SF Community Financial Center youth leaders, the Tenderloin Housing Clinic and the Center for Responsible Lending California. Similar events are taking place across the country this week, coordinated by National People’s Action.
CRC is asking consumers to sign a petition that will be delivered to the CFPB, calling on Director Richard Cordray to implement strong safeguards for consumers. The petition is available here: CFPB Petition.
California cities that have enacted payday lending restrictions include San Jose, San Diego, Sunnyvale, Long Beach, and Sacramento. Fresno and Daly City passed ordinances earlier this summer.
The CFPB announced a $10 million settlement with Ace Cash Express (200 California locations) in July. The CFPB found that ACE used illegal debt collection tactics including harassment and false threats of lawsuits or criminal prosecution to pressure overdue borrowers into taking out more loans. A page from Ace’s employee training manual instructed employees on how to pressure late customers into taking out additional loans.
The CFPB reached a settlement agreement with Cash America in November 2013 for robo-signing documents,and violating the Military Lending Act by illegally overcharging service members and their families. Cash America will pay up to $14 million in refunds to consumers and had to pay a $5 million fine for the violations and for shredding records before the CFPB’s visit.