WASHINGTON — On July 7, the Consumer Financial Protection Bureau (CFPB) released its final rule on Payday, Vehicle Title, and Certain High-Cost Installment Loans. The rule removed a requirement that lenders ensure a potential borrower will be able to repay their loan before issuing the loan. Archbishop Paul S. Coakley of Oklahoma City, chairman of the U.S. Conference of Catholic Bishops’ (USCCB) Committee on Domestic Justice and Human Development, issued the following statement in response:
“The USCCB has long advocated for a strong Consumer Financial Protection Bureau rule to prevent payday loan abuses to protect poor and vulnerable people. I am deeply disappointed by their final rule that strips away even the basic requirement that loans be made only when people can afford them, setting up workers and families to fail.
“Payday lending is modern day usury. These loans are marketed as an immediate source of money that is available before the next paycheck, but they are structured in a way that makes it nearly impossible for borrowers to repay in the short timeframe, often with triple-digit interest rates. The practice exploits the financial distress of vulnerable people and communities for the sake of profit, contributing to an economy of exclusion.
“Economic protections and just lending practices are more important than ever during this time of economic crisis caused by the coronavirus. We must work to ensure that those facing financial hardship are met with economic policies that promote the dignity of the human person and the pursuit of the common good. We encourage the U.S. Congress to take up measures to protect consumers and restrain predatory lending.”
The USCCB has long engaged with the Consumer Financial Protection Bureau for payday lending protections, including joining coalition submissions in 2016 and 2019, and advocating on the subject in 2013.