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Mick Mulvaney, the new unlawfully appointed acting director of the Consumer Financial Protection Bureau, plans to reopen the bureau’s rule on payday and car title loans, which usually have 300 percent annual percentage interest rate or higher, and have been regulated at 36 percent interest in Montana since 2011.

The payday rule, released last October and scheduled to go into effect summer 2019, would result in fewer families falling into financial ruin.

The rule contains a common-sense, ability-to-repay principal based on a borrower’s income and expenses, requiring lenders to determine whether a loan is affordable before making it. Affordable loans are ones a borrower can reasonably pay back without re-borrowing or going without basic necessities of life like food or rent money.

This move shows how much influence payday lenders have over Mick Mulvaney, who for years received campaign contributions while in Congress. Mulvaney is sending an unmistakable signal that he wants to kill this common-sense regulation.

The payday rule was issued after years of research and extensive stakeholder input; the evidence is overwhelming that these 300 percent APR loans trap borrowers in an unaffordable cycle of debt, causing severe financial harm such as bank penalty fees, delinquency on other bills, or even bankruptcy. There is no reason to reopen the rule, doing so shows disdain for consumer protection and low-income communities that are targeted by these debt trap loans. Montanans know the harms of the payday loan debt trap, and our fellow Americans should be safe from these predatory loans, no matter where they live.

Genoa Carver

Billings

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