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Submit a Comment to the CFPB on the Payday Lending Rule

The Consumer Financial Protection Bureau (CFPB) released a proposed rule on June 2 that would regulate unethical and predatory payday lending practices. This rule requires all lenders to consider their customer’s “ability to repay” before issuing high-interest, short term loans, sometimes with interest rates exceeding 300%.

The CFPB is asking for comments on their proposed rule. Submitting comments is very important to the process, not only to provide key feedback on the content of the rule, but also to encourage swift its implementation.

Make your voice heard and submit a comment here!


Background:

The Consumer Financial Protection Bureau (CFPB) has just released a proposed rule that would regulate unethical and predatory payday lending practices. Ideally, everyone would have access to credit and loans, regardless of income, citizenship or race. However, the reality is that not all borrowers can obtain loans from the prime market with competitive interest rates. As a result, too many borrowers become victims of “predatory lending.” Unethical lenders take advantage of less credit-worthy borrowers.

The CFPB’s proposed rule requires lenders to consider their customer’s “ability to repay” a short-term loan before it is issued. Lenders must consider their customer’s income, financial obligations, housing expenses, debt and other basic living expenses in order to consider if a short-term loan will not lead them into unsustainable debt.  The rule could go even further, removing the six-types of loans for which using the “ability to pay” principle is exempt, and by expanding the waiting period between which high-interest short term loans can be issued.

Jewish Values:

Jewish tradition teaches that a person who provides a loan with substantial interest violates two biblical mandates: the mandate of “not charging interest” and the mandate of “not putting a stumbling block before the blind” (Bava Metzia 5:10). Those who profit through predatory lending take advantage of vulnerable people, hurting their credit and wellbeing and making it harder for them to support themselves in the future. Judaism urges us to provide fair loans as a means of tzedakah, to lift up an individual, not to profit off of them. 

 

More information:

Visit the RAC’s predatory lending webpage to learn more about this rule and how you can get involved. You can also contact Eisendrath Legislative Assistant mailto:tdratch@rac.org?subject=CFPB rule free to edit the draft letter to include your own personal stories and comments, but please do not delete “Docket No. CFPB-2016-0025” at the top of the letter. This is how the CFPB will know which rule you are commenting on.