Statement by Paulina Gonzalez, executive director of the California Reinvestment Coalition in response to the announcement by the Consumer Financial Protection Bureau (CFPB) to rescind key provisions of its 2017 final rule governing “Payday, Vehicle Title, and Certain High-Cost Installment Loans.”
SAN FRANCISCO, Feb. 6, 2019 – In a disappointing and troubling announcement today, the Trump-appointed director of the CFPB today announced a rollback of a commonsense rule that required payday and car-title lenders to consider a borrower’s ability-to-repay before making high-interest loans. The ability-to-repay provision was a key safeguard to protect consumers from getting trapped in a spiral of debt.
CRC worked with more than 100 California organizations and a number of consumers to submit comments to the CFPB in 2016 as part of its rule-making process, urging the Bureau to implement strong reforms to protect consumers. With today’s announcement, it’s clear that CFPB director Kathy Kraninger is ignoring consumer and community voices and choosing instead to side with the payday loan industry, in direct opposition to the Bureau’s mission of protecting consumers. It’s time for California to take the steps necessary to pass our own small dollar lending guidelines that protect consumers from these predatory lending practices.
Contact: John Hoffman