Since 2012 the Bucks County Women’s Advocacy Coalition has been, in partnership with both federal and statewide coalitions, battling at the federal and state level to make sure the payday lending industry does not get its hooks into women and their families in Pennsylvania. The business model of the payday lenders is to entrap people who need short-term financial help into a situation where three digit interest rates, access to checking accounts, high fees, and recurring required loans bury a family in a nightmare of debt.
At the state legislative level once again the payday lenders are about to introduce a bill that would in the guise of “consumer protection” undermine the state’s cap on excessive interest rates. Please let your State Senator and Representative know of your concern and urge them to say “no” to any such bill that might be circulating for co-sponsors.
At the federal level, up until the Trump Administration came to power, the Consumer Financial Protection Bureau was able to wage war against the payday lending industry by restraining their ability to charge high interest rates for loans. But the new interim head of the CFPB has just re-opened the payday and car title lending rule issued last year, which would require that a lender determine whether a loan is affordable to the borrower before making it. An “affordable loan” is one that a borrower can reasonably be expected to pay back without re-borrowing or going without food or rent money.
Furthermore, the United States House of Representatives has just passed a bill (HR 3299) which would allow payday lenders to “rent a bank” to help them get around state interest rate caps. Unfortunately, our Congressman Fitzpatrick voted for the bill. Please let him know of your displeasure with his vote, and please let our US Senators Casey and Toomey know that we expect them to vote NO when the bill reaches the Senate.
What is needed is implementation of the Pew Charitable Trust recommendations issued this week which would set up standards for safe small installment loans from banks and credit unions. Consumers are spending more than $30 billion annually in high-cost loans outside the banking system to take care of their immediate financial needs. The Pew guidelines are designed to protect consumers by urging small installment loans and lines of credit that would be transparent to avoid confusion or abuse. Read the Pew report here: Standards Needed for Safe Small Installment Loans from Banks, Credit Unions. Please ask your own local banker if she/he is aware of this report and if your bank would consider it.
The payday lenders will stop their tactics only when enough of us make their lives miserable by recruiting a majority of elected officials who will stand with us in opposition to these predatory practices and products which ensnare women and their families into a debt trap. Please advocate for giving consumers better options.
Nancy Morrill is President Emerita of the Bucks County Women’s Advocacy Coalition.