Sanders, Leahy, Join Letter to CFPB re: Payday Lending

Senator Patrick Leahy

Vermont Senators Sanders and Leahy and 26 other U.S. senators sent a letter to CFPB Director Richard Cordray today expressing support for the agency’s small-dollar lending rule and encouraging it to strengthen consumer protections in the proposed rule before finalizing it. The effort was led by Senators Jeff Merkley (D-OR), Dick Durbin (D-IL), Sherrod Brown (D-OH) and Chris Coons (D-DE).

Senator Bernie Sanders

In the letter, the senators “encourage the CFPB to strengthen certain protections in the proposed rule to ensure the strongest possible defense against the predatory lending models that trap consumers in unaffordable and escalating cycles of debt. Research shows that small-dollar loans with excessive interest rates often drag consumers into a cycle of debt that is not sustainable… For most Americans, these high-cost loans are unaffordable with one in five borrowers eventually defaulting.”

Specifically, the Senators pressed the CFPB to strengthen provisions of the proposed rule that create exemptions from proving the customer’s ability to repay, and that shorten the “cooling-off” period between loans from 60 to 30 days.

In addition to Merkley, Durbin, Brown, Coons, Sanders and Leahy, the letter was signed by Senators Jack Reed (D-RI), Kirsten Gillibrand (D-NY), Edward J. Markey (D-MA), Al Franken (D-MN), Tammy Baldwin (D-WI), Elizabeth Warren (D-MA), Sheldon Whitehouse (D-RI), Martin Heinrich (D-NM), Ron Wyden (D-OR), Richard Blumenthal (D-CT), Patty Murray (D-WA), Dianne Feinstein (D-CA), Mazie Hirono (D-HI), Barbara Boxer (D-CA), Tom Udall (D-NM), Bob Casey (D-PA), Cory Booker (D-NJ), Maria Cantwell (D-WA), Barbara Mikulski (D-MD), Ben Cardin (D-MD), Chris Murphy (D-CT), and Charles E. Schumer (D-NY).

The full text of the letter is available online.

Management Minute | from the Association of Vermont Credit Unions