STATEMENT BY WILLIAM MCNARY ON NEW RULES TO CURB PREDATORY SHORT TERM LOANS
(CHICAGO) “Earlier today, the Consumer Financial Protection Bureau (CFPB) promulgated rules to regulate the predatory payday loan practices we have witnessed and fought against in Illinois for 17 years since Msgr. Egan brought us together as the Campaign for Payday Loan Reform in 1999. This announcement is a victory for us and everyone who has been organizing for it since that day” said McNary in a phone call open to press.
Today’s announcement by Director Cordray to crack-down on payday loans, auto-title loans, installment loans and online loans is, said McNary “a significant first step toward protecting consumers from predatory products and ending debt traps that ensnare working families in real financial harm.”
“We have always maintained that high interest loans should be as easy to get OUT of as they are to get INTO. Too often that is not the case” McNary said.
He continued, “Citizen Action/Illinois will continue to fight for the strongest possible rules through the comment period ahead guided by the following principles:
• Rules that reduce the cycle of debt by placing limits on multiple loans.
• Rules that require lenders to make loans based on the borrower's ability to repay.
• Rules that lower the cost of the loans using tools like fee caps, restricting balloon payments and by creating repayment plans.
• Rules that protect the borrower’s bank account from payday lenders assessing fees electronically leading to numerous overdraft charges, involuntary account closures and even bankruptcy. Payday lenders should not be first in line to access a consumer’s bank account.
• Rules that protect the public from subterfuge. From our experience, payday lenders and their slick legal teams are good at finding loopholes. If the CFPB does not close them on the front end, they’ll spend much of their time playing whack-a-mole later, knocking down one bad product to find another springing up somewhere else.
We applaud the CFPB for taking on an industry that has stripped communities of more than $10 billion since March of 2015 when this rule-making process began.”
He encouraged the public to make their voices heard via this link which will route comments on the rule to the CFPB.
McNary went on to thank President Obama for “His vision to create an independent agency charged with protecting consumers in the CFPB. The President was called by Msgr. Egan to be a member of the Campaign for Payday Loan Reform when he was a newly-elected State Senator.”
He also thanked CFPB Director Cordray for his “tenacious enforcement of payday lending laws which has already returned billions of dollars to consumers from fraudulent companies and financial institutions, large and small.”