Press Release: ACLU.org
WASHINGTON — The House of Representatives voted today to pass a resolution that would help put a stop to predatory lending and protect consumers across the country by preventing payday lenders from evading state interest rate caps.
The resolution will use the Congressional Review Act (CRA) to overturn a rule finalized last year by the Office of the Comptroller of the Currency (OCC) that facilitates predatory lending in all 50 states. Previously, the OCC’s final rule allowed lenders charging rates of 179 percent or higher to evade state interest rate laws by using a bank’s name on the paperwork.
The financial harms associated with predatory payday lending disproportionately impact communities of color and other marginalized communities, where payday lending stores are located in higher numbers and disproportionately market to members of those communities. The ACLU is a part of a bipartisan coalition of 25 State Attorneys General, as well as 325 civil rights, community, consumer, faith, housing, and veterans’ organizations, among others, that urged Congress to support the resolution.
Jennifer Bellamy, ACLU senior legislative counsel, had the following reaction:
“This is a huge victory for consumers everywhere and the fight for achieving economic and racial justice. Predatory payday lending makes racial inequalities in the economy even worse. These lenders disproportionately target people of color with high-cost loans that trap borrowers in a cycle of debt, ruining their credit, and limiting their ability to borrow at lower interest rates in the future. We need to protect all consumers from these predatory loans to help close the wealth gap that exists in this country.”
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