It can feel like a cosmic event when the government actually does something right. So I was excited to hear that the Consumer Financial Protection Bureau was rolling out a new rule to protect consumers from payday loans. Then, when I heard that those rules were being taken away before they even got out the door, I was furious.
This represents everything people hate about Washington. The CFPB used to look out for the little guy, but now they are putting the profits of a sleazy industry with deep pockets above the needs of working people. Payday lenders deceive customers and trap them in debt cycles of 500% APR loans — that’s almost 20 times more than credit card interest rates. There’s a reason payday loans are banned here and in many other states across the country: They only make life worse for the people tricked into using them.
It should be a no-brainer to help consumers out of these predatory loans, but industry hired a boatload of lobbyists to defend themselves. I’ll be voicing my disapproval of this plan to the CFPB. I encourage you to do the same, submit comments at stoppaydaypredators.org.