For Immediate Release: Monday, April 2
Richmond, Va. — Last week, Senator Mark Warner and Senator Tim Kaine, along with 41 other senators, sent a letter to Consumer Financial Protection Bureau (CFPB) Acting Director Leandra English and Office of Management and Budget (OMB) Director Mick Mulvaney urging them to preserve the bureau’s rule on payday lending. The senators stressed their concern over Mulvaney’s recently announced plan to reconsider the payday lending rule, which would result in financial harm to distressed Americans who are caught in the payday lending debt trap.
Virginia Organizing, as part of the Stop The Debt Trap coalition, lauded the letter and the effort of Virginia’s Senators to defend the payday lending rule.
“We commend Senators Warner and Kaine for their leadership in protecting consumers from abusive predatory lenders,” said Chairperson Del McWhorter. “Payday loans pull millions of distressed people around the country deeper into debt without regard for the borrower’s ability to repay the loan.”
McWhorter added, “Families and workers are counting on the CFPB to move forward and implement the payday rule without delay. Repealing the rule or halting it only undermines the countless hours of research and work that CFPB staff and consumer advocates have put into developing these important safeguards. We thank the Senators for taking a stand to protect consumers from these harmful loans and urge the consumer bureau to keep the payday lending rule intact.”
The rule is scheduled to go into effect summer 2019, 21 months after being published in the federal register—a more than ample implementation period. Released in October of last year, these protections will result in fewer families falling into financial ruin.
At the heart of the rule is the common-sense ability-to-repay principle based on a borrower’s income and expenses, which means that lenders will be required to determine whether a loan is affordable to the borrower before making it. An affordable loan is one a borrower can reasonably be expected to pay back without re-borrowing or going without the basic necessities of life like food or rent money.
The rule release was years in the making, and it wouldn’t have been possible without the tireless effort of community and faith leaders, consumer and civil rights advocates, and countless people across the country who organized and spoke out against the devastating payday loan debt trap.