CNA Staff, Jul 13, 2020 / 11:01 am
The revocation of restrictions on payday lenders by the Consumer Financial Protection Bureau exposes poor and vulnerable persons to 'predatory and abusive lending practices', the US bishops' conference said last week.
On July 7 the CFPB removed requirements that lenders ensure borrowers can repay a loan before issuing it, and limited how many successive loans could be taken out by a borrower.
"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," Archbishop Paul Coakley of Oklahoma City, chair of the US bishops' domestic justice committee said July 10.
He called payday lending "modern day usury," saying the loans "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."