Merkley denounces new ‘payday predator protection plan’
Sen. Jeff Merkley, D-Ore., released the following statement Wednesday after the Consumer Financial Protection Bureau, under the leadership of a Trump appointee, announced new rules that he said gut protections against predatory payday lenders:
“Every day, the Trump Administration prioritizes the privileged and powerful over working Americans, but deliberately helping loan sharks to cannibalize the pocketbooks of vulnerable families is a low blow even for them. Let’s call it for what it is: a payday predator protection plan. Payday lenders prey on cash-strapped families during their toughest times, often issuing loans with annual interest rates as high as 500% and sucking families into an inescapable vortex of debt.
“The CFPB’s own research that led to these rules concluded that these predatory loans are ‘debt traps’; that four out of five payday loans are rolled over or renewed because the recipient cannot afford the loan; and that the majority of loans are made to borrowers who have to renew so many times that their fees end up exceeding the original amount of the loan.
“The rule being gutted by today’s action had one simple premise: that lenders should not issue loans they know their borrowers cannot repay. There is no reason to defend payday lenders’ ability to issue loans that are, by definition, unaffordable, unless your goal is to prop up a predatory industry at the expense of consumers. This payday predator protection plan is a huge mistake and a crystal clear sign of where the Trump Administration sides when it comes to working families.”
Merkley has been a strong proponent of ending predatory lending since his time in the Oregon Legislature, Wednesday’s news release said. As speaker of the Oregon House, he led the successful fight to cap exorbitant interest and fees on payday loans in Oregon. In the Senate, he wrote provisions of the Wall Street reform act to end predatory mortgage loans and has been a leader in fighting to end predatory behavior in online lending and to institute a national cap on interest and fees for payday loans.
