Consumer advocates to the federal government: don’t legalize payday loans in states like North Carolina
Federal regulators at Consumer Financial Protection Bureau are moving forward with developing rules to regulate the predatory payday lending industry and that’s great news for vulnerable consumers in dozens of states. A significant potential problem with the effort, however, involves states like North Carolina that once had the common sense to ban predators outright.
Consumer advocates say if federal officials aren’t careful how they write the new rules, they could potentially legalize payday loans in places like North Carolina, even if they’re cracking down on others. States. Recently, dozens of lawyers in states where payday loans are already illegal (including several here in North Carolina) wrote to CFPB director Richard Cordray, urging him to carefully adapt any new rules to avoid this problem. .
In the letter, advocates urged the CFPB “to issue final rules that build on, rather than undermine, strong state protections and improve our ability to enforce them.”
The groups continued, “Indeed, it would be unacceptable for the CFPB to publish weak payday lending rules, which would likely trigger a new wave of predatory lending in unauthorized states and across the country.”
Hopefully the agency sees the obvious wisdom in allowing states to pass and maintain consumer protection laws that are stricter than soon to be implemented rules and to maintain federal standards as the bedrock of basic consumer protection. , rather than as a cap.
And for more information on stopping the payday loan debt trap, Click here.