Via Electronic Submission

The Honorable Richard CordrayConsumer Financial Protection Bureau1700 G Street NWWashington

Re: Proposed rulemaking on payday, automobile name, and specific high-cost installment loans, Docket No.

Dear Director Cordray:

We, the 131 signatories for this letter, represent a cross-section that is diverse of officials, government, work, grassroots organizing, civil legal rights, appropriate solutions, faith-based as well as other community companies, in addition to community development finance institutions. We respectfully request that the CFPB count this page as 131 responses.

Together, we urge one to issue a stronger payday lending rule that ends the cash advance financial obligation trap. While the CFPB makes to issue a last guideline to deal with payday financing nationwide, we urge you not to ever undermine our state’s longstanding civil and criminal usury regulations. Certainly, we urge one to issue a rule that improves our current defenses.

Whilst the CFPB truly acknowledges, a listing of signatories with this magnitude and breadth just isn’t you need to take gently. This page reflects the positioning greater than 38 state and neighborhood elected officials, the NYC Department of customer Affairs, the Progressive Caucus regarding the NYC Council – also as 92 businesses that represent an easy spectral range of communities, views, and constituents. Our company is concerned that the CFPB is poised to issue a rule that is weak wouldn’t normally only set a decreased club for the whole country, but that could also straight undermine our state’s longstanding ban on payday financing.

As New Yorkers, we think we now have a perspective that is especially relevant share. Significantly more than 90 million Americans – nearly a 3rd associated with the country – real time in states like ny where lending that is payday unlawful. Our experience plainly shows that: (1) folks are means best off without payday financing; and (2) the way that is best to address abusive payday lending, and also other types of predatory high-cost lending, would be to place a finish to it for good.

As proposed, the CFPB’s payday financing guideline is filled up with loopholes and would efficiently sanction high-cost loans which can be unlawful within our state and lots of other jurisdictions in the united states. We turn to the CFPB to issue a very good final rule that does maybe perhaps not undermine New York’s longstanding usury along with other customer security rules. We urge one to set a bar that is high the whole country and issue a rule that enhances, and will not undermine, our current protections. We ask the CFPB to make use of its complete authority to issue the strongest feasible rule that is final will really end the pay day loan financial obligation trap.

The payday financing industry has thrived because more and more people within our nation would not have adequate earnings to pay for their fundamental cost of living. The very last thing struggling people need are predatory, high-cost loans that dig them into a level much much deeper hole — just what happens now in states that allow payday financing. Certainly, numerous New Yorkers have been in economic stress, struggling in order to make ends satisfy from paycheck to paycheck (or federal federal government advantages check to federal federal federal government advantages check), together with proven fact that we usually do not allow payday financing right here has proven crucial to protecting a giant part of this populace from economic exploitation. Where lending that is payday lawfully allowed, the industry has targeted black and Latino communities, draining vast sums of bucks and perpetuating the racial wide range space within the U.S.

In a nutshell, we start thinking about ourselves exceedingly fortunate to reside and work with a situation that bans payday financing. Our centuries-old usury law makes it a felony to charge significantly more than 25 % interest on that loan. Maintaining lending that is payday of the latest York has supplied vast advantages to New Yorkers, neighborhood communities additionally the state economy in particular. Every year, as an example, our state’s law that is usury New Yorkers about $790 million they would otherwise invest in costs for unaffordable payday and vehicle name loans.1

Despite these clear benefits, payday lenders have actually for several years tried to crack open our usury legislation while making predatory lending that is high-cost in our state. Seeing an untapped, profitable market they might exploit in ny, the payday lending and look cashing trade teams have actually over over and over over and over repeatedly forced our state legislature to legalize high-cost payday as well as other types of harmful financing. over and over, these efforts have actually pitted the general public interest against predatory financing passions, resulting in unsightly battles between community teams and industry, and draining massive general general public resources in the act. Luckily, we now have successfully beat right right back these tries to gut our usury legislation, many many thanks in big measure to advocacy that is effective a broad coalition of community, work, and civil liberties teams, that has guaranteed that payday lending stays unlawful inside our state.

Our company is well conscious that the CFPB might not set interest levels, nevertheless the agency can and may make use of its complete authority to simply just take strong action. Missing strong action that is federal stopping payday lending, including payday installment financing, will still be a casino game of whack-a-mole.

We have been extremely concerned that a poor CFPB guideline will play straight into the fingers associated with the lending that is payday, supplying it with ammo needed seriously to defeat strong laws and regulations like we now have in New York. Indeed, in Pennsylvania and Georgia, the payday financing lobby has apparently utilized the CFPB’s 2015 blueprint for the guideline, suggesting to convey legislators that the CFPB has offered its stamp of approval to high-cost payday and payday-like loans.

The proposed guideline includes a list that is long of and exceptions that raise major issues for the company. We highly urge the CFPB, at the very least, to:

• Require a significant “ability to repay” standard that is applicable to any or all loans, without exceptions along with no safe harbors or appropriate immunity for poorly underwritten loans. The “ability to repay” supply should need consideration of both earnings and costs, and declare that loans which do not satisfy a significant capacity to repay standard payday loans in Texas are per se unjust, unsafe, and unsound. a poor CFPB rule that enables loan providers to produce unaffordable loans or that features a harbor that is safe not just enable for continued exploitation of men and women struggling which will make ends fulfill. It can additionally offer payday loan providers unwarranted ammo to knock down current state protections, because they have already been aggressively wanting to do for decades.

• Fortify the enforceability of strong state customer security laws and regulations, by giving that providing, making, facilitating, servicing, or gathering loans that violate state usury or other customer security laws and regulations is definitely an unjust, misleading, and act that is abusive practice (UDAAP) under federal legislation. The CFPB’s success in deploying its UDAAP authority against payday loan providers such as for example CashCall – which a federal court recently discovered had involved in UDAAPs by servicing and gathering on loans that have been void or uncollectible under state legislation, and that your borrowers consequently would not owe – as well as against loan companies, re re payment processors, and lead generators, provides a powerful appropriate foundation for including this explicit dedication with its payday financing guideline. In so doing, the CFPB may help make sure the viability and enforceability associated with rules that presently protect people in payday loan-free states from unlawful financing. At least, the CFPB should provide, according to the court’s choice against CashCall, that servicing or gathering on loans which can be void or uncollectible under state legislation are UDAAPs under federal legislation.

We’re profoundly concerned that weaknesses into the proposed guideline will inevitably be observed as sanctioning high-cost loans that are unlawful in ny. a guideline that undercuts laws and regulations that protect tens of an incredible number of Americans in payday loan-free states will not, within our view, represent sound policy-making that is public no matter if the guideline mitigates a few of the harms due to payday financing in states where it really is now appropriate. numerous teams are discussing the proposed guideline as handling the worst abuses of payday financing. Because of the agency’s clear mandate, and offered all we realize about payday financing, why isn’t the CFPB seeking to deal with most of the abuses of payday financing?

Families inside our state — and everywhere — are best off without these high-cost, unaffordable loans. We urge the CFPB to issue the strongest rule that is possible without loopholes.