Coalition for Safe Loan Alternatives applauds new CFPB rules to crack down on predatory lenders
WASHINGTON, DC (June 2, 2016) — The Consumer Financial Protection Bureau (CFPB) and Director Richard Cordray today announced new rules to crack down on predatory payday and auto title lenders. The CFPB’s rules would force lenders to verify that borrowers have enough money to pay back their original loan and would limit the number of times a loan can be refinanced, ensuring borrowers are not trapped in an endless cycle of debt.
“The Coalition for Safe Loan Alternatives fully supports the CFPB’s work to protect borrowers and rein in predatory lenders,” said David Rothstein, chair of the Coalition for Safe Loan Alternatives. “Our coalition members are committed to acting well within these rules to ensure that working families can obtain safe, affordable loans without trapping them in a cycle of debt that drains their assets.”
“Through our TrueConnect program, Employee Loan Solutions has delivered a product that is unprecedented in the industry – a short-term loan that doesn’t break the bank and gives borrowers the money they need in times of emergency,” said Doug Farry, Executive Vice President of Employee Loan Solutions, Co-Founder of TrueConnect and a member of the Coalition for Safe Loan Alternatives. “TrueConnect is proof that small loans can be made that are both fair to consumers and sustainable for lenders. The payday loan industry for far too long has made excuse after excuse for not providing small loans at a reasonable interest rate. That’s why the CFPB regulations make so much sense and that’s why we support them.”
“With over 26 million Americans with thin or no credit, the U.S. needs more banks to step up, facilitate responsible innovation, and develop more safe small dollar loan products to address this overwhelming consumer need,” said David Reiling, Sunrise Banks CEO. “TrueConnect is a great example of how we can provide a safe loan alternative for more Americans.”
In addition to expanding credit checks for potential borrowers and putting limits on refinancing opportunities, the CFPB’s rules will also ensure lenders notify their customers before trying to collect payment from the borrower’s bank account.
To learn more about the Coalition or to get involved, please visit http://safeloancoalition.com/.
Additional information about Employee Loan Solutions can be found at www.employeeloansolutions.com.
About The Coalition for Safe Loan Alternatives
The Coalition for Safe Loan Alternatives is made up of more than 25 community organizations, advocacy groups, local banks, and credit unions from across the country who work to develop safe and secure short-term loans for borrowers in need. One of its members, Employee Loan Solutions, has developed a product called TrueConnect, which offers short-term loans to consumers provided by Sunrise Banks of St. Paul, Minnesota and allows borrowers to pay back interest through payroll deductions.