Merkley, Colleagues Urge Crackdown on 'Predatory' Lenders
KTVZ.com, Enews Park Forest - As the Consumer Financial Protection Bureau considers new rules to rein in predatory practices in payday and similar types of lending, Sen. Jeff Merkley, D-Ore., and 31 Senate colleagues expressed support Thursday for the agency's first steps and urged the strongest possible rules to combat the "cascade of devastating financial consequences" the high-priced loans often have on consumers. Read
In a letter to CFPB Director Richard Cordray, Merkley was joined by Sens. Dick Durbin (D-IL), Chris Coons (D-DE), Tammy Baldwin (D-WI), Richard Blumenthal (D-CT), Cory Booker (D-NJ), Barbara Boxer (D-CA), Sherrod Brown (D-OH), Maria Cantwell (D-WA), Ben Cardin (D-MD), Dianne Feinstein (D-CA), Al Franken (D-MN), Kirsten Gillibrand (D-NY), Martin Heinrich (D-NM), Mazie Hirono (D-HI), Tim Kaine (D-VA), Angus King (I-ME), Amy Klobuchar (D-MN), Patrick Leahy (D-VT), Edward J. Markey (D-MA), Chris Murphy (D-CT), Gary Peters (D-MI), Jack Reed (D-RI), Bernie Sanders (I-VT), Brian Schatz (D-HI), Chuck Schumer (D-NY), Jeanne Shaheen (D-NH), Debbie Stabenow (D-MI), Tom Udall (D-NM), Elizabeth Warren (D-MA), Sheldon Whitehouse (D-RI), and Ron Wyden (D-OR).
The senators wrote:
"We support the CFPB's initial steps towards releasing a proposed rule and urge you to issue the strongest possible rules to end the damaging effects of predatory lending.
"Small-dollar, short-term loans with astronomical interest rates that pull consumers into a cycle of debt are predatory. These loans have high default rates, including after the borrower has already paid hundreds or thousands of dollars because of triple-digit interest rates. Even if consumers do not default on these loans, high interest rates, preauthorized payment methods and aggressive debt collection efforts often cause a cascade of devastating financial consequences that can include lost bank accounts, delinquencies on credit cards and other bills, and bankruptcy."