WASHINGTON, D.C. – Oregon’s Senator Jeff Merkley, along with Senate Democratic Whip Dick Durbin (D-IL) and top Banking Committee Democrat Sherrod Brown (D-OH), today led a group of 47 Senators in opposing the Consumer Financial Protection Bureau’s (CFPB) new attempt under Trump leadership to gut its own payday protection rule.
Today’s push was joined by every member of the Senate Democratic Caucus.
“Repealing this rule provides a green light to the payday lending industry to prey on vulnerable American consumers,” wrote the Senators in a letter to Trump-appointed CFPB Director Kathy Kraninger. “In drafting these devastating changes to the Payday Rule, the CFPB is ignoring one of the most fundamental principles of consumer finance — an individual should not be offered a predatory loan that they cannot pay back.”
Payday loans often carry interest rates of 300% or more, and trap consumers in a cycle of debt. The CFPB’s own research found that four out of five payday consumers either default or renew their loan because they cannot afford the high interest and fees charged by payday lenders.
The CFPB’s previous payday protection rule—which would be gutted by this new action—was finalized in October 2017 after years of research, field hearings, and public input. “The CFPB has not made similar research, field hearings, or investigations, if they exist, available to the public in order to explain its decision to repeal crucial elements of the rule,” the Senators wrote today. “The absence of such research would not only imply neglect of duty by the CFPB Director, but may also be a violation of the Administrative Procedure Act.”
In response, the Senators asked for the CFPB to make public the following information no later than 30 days from today:
Any research conducted regarding the impact on borrowers of repealing these requirements for payday loans;
Any field hearings or investigations performed by the Bureau after the rule was finalized regarding the impact of repealing these requirements for payday loans;
Any public or informal comments sent to the CFPB since the rule was finalized regarding to these provisions in the Payday Rule; and
Any economic or legal analyses conducted by or sent to the CFPB concerning the repeal of these requirements for payday loans.
The full text of the letter is available here and follows below.