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Senator Introduces Resolution to Repeal CFPB Payday Rule & Trap Consumers in Debt

Friday, March 23, 2018

WASHINGTON, D.C. – U.S. Senator Lindsey Graham (R-S.C.) has introduced a Congressional Review Act (CRA) resolution, S.J. Res. 56, which would repeal the Consumer Financial Protection Bureau (CFPB) rule to stop payday and car title loan debt traps and prevent the CFPB from ever issuing a similar rule. The CFPB rule, finalized in October, established basic consumer protections, including the commonsense standard that lenders should have to verify a borrower’s ability to repay before making the loan.

Center for Responsible Lending Federal Advocacy Director Scott Astrada issued the following statement:

Payday loans trap people in a vicious cycle of debt with loans costing over 300% annual interest. The debt trap is their business model, with 75% of loan fees going to people trapped in more than 10 loans a year. This often leads to overdraft, involuntary bank account closures, delayed medical care, and bankruptcy. The Consumer Bureau’s rule would help free people from this suffocating debt trap and its efforts are supported people all across this country including veterans groups, faith leaders, civil rights organizations, consumer advocates, and many more. Congress should stop defending the payday lenders and reject this misguided resolution.

Additional Background

This Senate resolution is a companion to the House resolution, H.J. Res. 122. These legislative efforts mirror actions by the unlawfully appointed Acting Director of the Consumer Financial Protection Bureau, Mick Mulvaney, who has taken several actions to let predatory lenders get away with harming consumers.

For more information, or to arrange an interview with a CRL spokesperson on this issue, please contact Ricardo Quinto at ricardo.quinto@responsiblelending.org.