WASHINGTON, D.C. – Oregon’s Senator Jeff Merkley released the following statement after the Consumer Financial Protection Bureau (CFPB) issued a new rule to protect consumers from debt traps caused by payday and other short-term loans with exorbitantly high interest rates—sometimes as high as 500% APR.
Merkley has been a leader in taking on predatory payday lending since his time as Speaker of the Oregon House, when he passed a landmark consumer protection law capping interest and fees on payday loans in Oregon. In the U.S. Senate, he has continued to be a leading voice for taking on the predatory and devastating impacts of payday loans on working families.
“I will never forget visiting a food bank in Oregon shortly after Oregon’s payday lending cap went into effect. The director of the food bank immediately came up to me and began explaining that before the new law, she had frequently seen families coming into the food bank because they no longer had money for their basic expenses after their finances had been destroyed by unaffordable, high-interest payday loans. Now, she no longer saw those families. Oregon’s law had changed the lives of thousands of working families for the better, keeping them free from a vortex of debt that, as that food bank director attested, was often impossible to escape.
“It is common sense that someone scraping by paycheck to paycheck simply cannot afford to repay a loan with 500% interest—and it is that common sense principle that guides the CFPB’s landmark action today. I applaud the CFPB for using their power to protect the millions of American consumers who get caught in these vortexes of debt each year. Ending this predatory lending is one of the most important actions we can take to make life better for America’s working families who are struggling the hardest to make ends meet.
“Undoubtedly, the industry that profits off of these predatory loans will throw the kitchen sink at the CFPB to try to prevent today’s new guidelines from going into effect. They will use the courts and Congress to try to overturn these common-sense rules and, if successful, go back to ripping off consumers with impunity. We cannot let that happen, and I will do everything in my power to keep these rules in place and strengthen them.”