Today, Prosperity Indiana submitted a letter on behalf of our network in response to the proposal to rescind the commonsense ability-to-repay requirements of the Consumer Financial Protection Bureau (the Bureau)’s 2017 payday and vehicle title loan rule (“Ability-to-Repay Rule” or “Rule”). Payday lending is associated with greater risk of delinquency on rent payments and other bills, delayed medical care, overdraft fees, loss of bank accounts, and bankruptcy. It can also inflict severe psychological harm, including distress resulting from aggressive debt collection practices
Prosperity Indiana's letter cited polling from Indiana, conducted by Bellwether Consulting on behalf of numerous consumer coalition partners. As the letter outlines, the poll found "87 percent of respondents saying payday loans are a financial burden versus a financial relief; 94 percent said they are expensive versus inexpensive; and 84 percent said they are harmful versus helpful. Of critical importance to the CFPB’s proposed rule, 78 percent support requiring payday loan lenders to determine a borrower’s ability to pay back a loan without defaulting on other expenses."
Our letter noted that "in Indiana, advocates for consumers and strong
communities will continue to push for a statewide cap on payday loans. Prosperity Indiana will continue to expand the non-profit Community Loan Center program, offering consumers a low-cost payday alternative through employer partnerships. We will continue to strive for greater equity in lending and work to remedy the fact that many regulated banks have divested in communities of color while payday lenders are found to be 2.4 times more concentrated in African American and Latino communities."
The letter concluded by urging Director Kraninger to stand by the CFPB's mission: "In Indiana, we are working hard to empower consumers and support communities to reach that goal, but payday lending is undermining our efforts. The CFPB should be fulfilling its mission to protect consumers from unfair and deceptive practices and move forward with implementing the payday rule and maintaining the ability to repay standard. We urge you to reconsider this proposal and stand by consumers."
Prosperity Indiana also joined numerous consumer coalition partners in sending this letter as well: https://www.regulations.gov/document?D=CFPB-2019-0006-25771