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Montanans have some of the best protections against payday and other abusive loans in the country, and we fought hard to get there. In 2010, we voted not to let lenders charge more than 36 percent interest; we decided to push predatory loans out of our state. Montanans have saved an estimated $37 million per year from leaving our pocketbooks and our state with this victory.

Other states aren’t always so lucky. Payday loans continue to ensnare their communities in cycles of debt with false promises of fast cash. The Consumer Financial Protection Bureau has been reining in these loans when they break the law and is planning to release further protections for borrowers of these loans, which are designed to catch people in a debt trap.

Payday lending lobbyists have been in Washington pushing other federal agencies, like the Federal Deposit Insurance Corporation and the Office of the Comptroller of Currency, to loosen guidelines that prevent banks from offering payday loans. If these guidelines were loosened, banks like Wells Fargo (the largest bank to previously offer these types of loans) would be able to help payday lenders disregard our Montana laws, and the Consumer Bureau would provide Montanans our only defense against predatory loans. I hope that the FDIC and OCC don't allow payday lenders to partner with banks to break our state's laws.

Gianforte's vote

Perhaps even worse, in early September, a majority in the U.S. House chose to side with America’s legalized loan sharks. Rep. Greg Gianforte joined others in voting in favor of a special carve-out in the appropriations bill that would prevent the Consumer Bureau from enforcing the law and responding to the complaints of consumers. If someone offered an illegal payday loan in Montana, Gianforte has now said, the Consumer Bureau shouldn’t be able to do anything about it. This is in direct conflict with the way that Montanans feel about payday loans. He ought to be applauding the bureau for working so diligently to see that consumers are protected from fraudulent financial products. Next time, we hope Gianforte will choose to better represent Montana values and the letter of the law.

Having strong federal protections in place will protect Americans from this plague of predatory loans. Fortunately, the Consumer Bureau is set to release a rule on payday and car title loans by early October. We hope that the protections issued by the Consumer Bureau are strong and, as in the proposal released last year, affirm that state interest-rate caps are the best protection for borrowers. It’s critical that the CFPB be allowed to put those protections in place, and to continue its success reining in abuses by payday lenders (not to mention Equifax and Wells Fargo) when they break the law.

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Tester's military bill

Sen. Jon Tester has been working hard to ensure that Montana veterans and service members continue to be protected. In June, he cosponsored a bill from Sen. Jack Reed that enhances the Consumer Bureau’s ability to better protect service members and families from scams. While Tester and the Consumer Bureau continue to stick up for Montanans, let’s put a stop to the efforts of predatory lenders to get a free hand to break the law.

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Katie Sutton, of Billings, writes on behalf of Montana Organizing Project.

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