By Genoa Carver, Billings
Mulvaney, unlawfully appointed acting director of Consumer Financial Protection Bureau, strikes again. CFPB wants to extend payday lending rule compliance date 445 days from August 2019. This would not only cause more people to get trapped into financial harm, but would manufacture a delay so Mulvaney can kill the rule entirely.
The bureau’s payday lending rule creates protections against payday lending schemes. Payday loans consistently have 300% APR or higher, and are regulated to 36% in Montana. The rule contains a common-sense ability-to-repay principal, based on borrower’s income and expenses, requiring lenders to determine whether loans are affordable. Loans borrowers can reasonably pay back without re-borrowing or going without basic necessities, like food or rent.
Mulvaney seems to want to kill common-sense protections. This shows payday lender influence over Mulvaney, who received congressional campaign contributions.
Overwhelming evidence shows predatory 300% APR loans trap borrowers in unaffordable cycles of debt, causing severe financial harm including bank fees, bill delinquency, or bankruptcy. There’s no reason to postpone the rule, doing so shows disdain for consumer protection and low-income communities targeted by debt-trap loans.
Montanans know the harms of these loans. Americans should be safe from predatory loans, no matter where they live.