In the coming months, the Consumer Financial Protection Bureau (CFPB) will issue a final rule on regulating the payday lending industry. This would provide welcome relief for many consumers who live paycheck-to-paycheck. But while the CFPB makes its ruling, our work is not done.
Stay involved in the fight against predatory payday loans by joining our email list at the Stop the Debt Trap website. Together, let’s make sure the CFPB rules are strong enough to eliminate any loopholes and protect consumers from harmful and unaffordable loans.
WHY ARE WE TAKING ON the payday lending industry?
The payday lending industry has gone unregulated for too long, pushing out unsafe and unfair financial products that have drained income from hardworking Latinos and other consumers, trapping them in a costly debt cycle.
These shady lenders have become common in low-income communities. They market themselves as a quick financial fix, but in reality they create a long-term debt trap that leaves many consumers worse off if they can’t pay back the original loan in time. The typical payday loan carries a 391% annual percentage rate (APR), and payday lenders make these loans with no regard to a consumer’s ability to repay them.
Many consumers then have to resort to taking out another loan to cover the first one. Suddenly that loan, which was originally only for a couple hundred dollars, ends up costing the borrower well into the thousands.