“Soul-crushing.” “A hole you can’t get out of.” “A living hell.” These descriptions are from borrowers who have been trapped in payday loans. Payday loans are marketed as one time “quick-fix” loans for people facing a cash crunch. In reality, these loans create a long-term cycle of debt that make families worse off.
Research shows that these loans, which come with triple-digit interest rates, are designed to entrap borrowers. In a commentary published this week in the Washington Examiner, Diane Standaert of the Center for Responsible Lending makes the case for keeping sensible rules that the Consumer Financial Protection Bureau (CFPB) has already passed after years of analysis and research. Today, in a sharp reversal and with no further research, the CFPB is threatening to prevent the new rules from becoming effective.
The consequences of rejecting protections would be severe for families already struggling. “If payday lenders succeed in gutting the payday lending rule, then millions of cash-strapped Americans will continue to be caught in a crippling cycle of 300% interest loan debt,” says Diane Standaert.
Read the entire piece here.
Diane Standaert, author of the Washington Examiner piece, is an expert on payday lending and other predatory financial practices. She serves as director of state policy at the Center for Responsible Lending.
Find more information and take action at www.stopthedebttrap.org.