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Empire Justice Center Comments to CFPB on High Cost Installment Loans

October 7, 2016

 

Small dollar installment lending that includes interest rates higher than twenty-five percent are prohibited in New York by state law.  We have been very proud of, and feel very fortunate that the payday loans that we see wreaking havoc and draining money from low-income folks in other states cannot legally be made to New Yorkers.  We have not taken this fortunate position for granted as every single year for the past several, lobbying attempts by the industry try to push our doors open, even just a crack, to allow for payday lending to come into New York.  The lobbying efforts by the industry are fierce and speak to the volumes of profits lenders would love to be making off of the backs of the most financially vulnerable New Yorkers through high-cost installment lending.  

We appreciate that the rules developed by the CFPB are targeted at states where payday lending is legal.  We believe there is ample evidence showing that payday loans with interest rates higher than say New York’s twenty-five percent cap, are inherently unfair and harmful and should just be banned.  We urge the CFPB to take this position and not condone the industry whatsoever; regulations end up being interpreted as approval of a practice. 
 
If there is an unwillingness to ban high-cost payday lending outright on the federal level, then we call on the CFPB to act with great care to ensure that the rules only have the effect of regulating payday lending where it is legal, and not the unintended effect of opening the door to payday ending in states where it is illegal.  The regulations should be keeping the bar high, as high as it has been set in the states that ban payday lending, and raising the other states up a notch towards that bar.

CLICK HERE to read our comments.

For more information, please contact:


Kirsten E. Keefe

Empire Justice Center
119 Washington Avenue
Albany, NY  12210 


(518) 462-6831
(518) 935-2852
kkeefe@empirejustice.org