Consumer group targets payday lenders with Capitol Hill push
By Tim Devaney
In the Hill
Payday lenders are the target of a new online campaign launching Wednesday around Capitol Hill.
The left-leaning Americans for Payday Lending Reform is launching a campaign aimed at getting federal regulators to place new restrictions on lenders that offer short-term financing in exchange for high fees and interest rates.
This comes as the Consumer Financial Protection Bureau (CFPB) prepares new rules for payday lenders.
“The payday lending industry is the worst of the worst — using predatory practices to take advantage of their customers,” said Liz Ryan Murray, who is leading the campaign.
“Creditors should help build wealth for working families, but payday lenders get rich by profiting off the most vulnerable," Murray added. "Our campaign will expose the ruthless greed and predatory nature of this industry.”
The CFPB and Senate Democrats have both been critical of payday lenders, saying they trap low-income consumers in "cycles of debt."
But Republicans say payday lenders that follow the rules offer much-needed money to people who can't get financing elsewhere and need quick cash to pay their bills.
The CFPB is working on new rules for payday lenders that financial market observers expect will crack down on the industry.
Murray said she would like the CFPB to stop payday lenders from going after consumers who can't afford to repay the loans, and to place limits on the number of payday loans a consumer can take out in a given year.
Furthermore, payday lenders should not be allowed to require borrowers to give them direct access to their bank accounts so they can make automatic withdrawals, Murray said.
"Payday lenders use shady tactics to get around laws designed to protect consumers and promote industry accountability," she said.