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Consumer Bureau Highlights Payday Loan Debt Trap
Advocates Urge Congress to Repeal "Fake Lender" Rule
The Consumer Financial Protection Bureau (CFPB) recently released a report on payday, car title, and pawn loans. The report demonstrates that once consumers take out one of these loans, they end up in a cycle of debt that can last a year or more.
The report notes that consumers frequently roll over these loans or take out a new loan soon after re-paying the previous loan. In June 2019, of the consumers who had taken out a loan in the previous six months, 63 percent still owed money on a payday loan; 83 percent still owed money on an auto title loan; and 73 percent still owed money on pawn loans . . .
Advocates welcomed reports that Treasury Secretary Janet Yellen plans to appoint a new acting head of the Office of the Comptroller of the Currency (OCC), replacing Blake Paulson, in light of the highly deceptive and false claims that the agency, under Paulson’s leadership, put forward as Congress debates overturning the OCC’s “fake lender” rule. The fake lender rule will enable a massive expansion of predatory lending in all 50 states if the rule is permitted to remain in effect. Congress must pass the Congressional Review Act (CRA) resolution introduced by Senators Sherrod Brown (D-OH), Chris Van Hollen (D-MD), S.J. Res. 15, and Rep. “Chuy” García. H.J. Res. 35, to overturn the fake lender rule.