National Council of La Raza collects thousands of signatures and comments on new Consumer Financial Protection Bureau proposed rule to regulate predatory lending industry
Latino community supports strong protections against unsafe financial products
WASHINGTON, DC (October 11, 2016) — Today, as the Consumer Financial Protection Bureau (CFPB) ends its public comment period, NCLR (National Council of La Raza) announced it had gathered thousands of signatures in support of a strong rule for the abusive industry. Throughout the months-long comment period, NCLR has worked with its Affiliate organizations and its action network to collect over 7,000 signatures from concerned Latino families across the nation. As part of a broader coalition of groups, the organization also helped gather 400,000 comments from community members, many of whom have been directly impacted by predatory loans. Supporters of the rule are urging the agency to issue a final rule that closes dangerous loop holes that currently permit predatory lenders to trap borrowers in a cycle of debt.
“There has been an outpouring of support for strong action against the lenders who prey on low-income families and communities of color. Millions of families have been either directly affected or had a family member or friend fall victim to predatory lenders. And the consequences have been devastating, with people unable to meet their family’s basic needs because they are caught up repaying debts that can balloon to 300 times the original loan amount,” said Janet Murguía, President and CEO, NCLR.
The CFPB is set to issue a final rule in the coming months. Consumer and civil rights advocates, including NCLR, have urged the agency to close the loopholes in the proposed rule that would still allow some of the most egregious lending practices to continue. Over the past two years, NCLR has worked with its Affiliate network to collect stories of victims affected by payday loans, highlighting them in a weekly blog series, “Truth in Payday Lending,” and in a video where we hear directly from borrowers about this predatory industry. On the NCLR website, borrowers considering these loans or looking for alternatives can find resources in both English and Spanish. Latinos and other communities of color have been heavily targeted by both storefront and online payday lenders. In fact, studies have shown that race and ethnicity are lead determining factors when payday lenders select the physical location of their stores.
“While we are pleased that the CFPB is moving toward adopting an important rule that prevents abusive practices in payday and similar types of lending, we urge them to carefully consider the feedback of people who are affected by these abusive practices. NCLR heard from over 7,000 Latino voices during the comment period, and they want a rule that includes a strong ability-to-repay requirement so that predatory lenders cannot continue business as usual. We are hopeful that the final rule will close any loopholes and rein in an industry that has skirted regulation for far too long,” concluded Murguía.
About National Council of La Raza
Every day Latinos work to make America stronger. They energize the economy and strive to make better lives for themselves, their families, and their communities. Our mission is to improve their opportunities for success in achieving the American Dream.
Since 1968, the National Council of La Raza has remained a trusted, nonpartisan voice for Latinos. This is the community we serve through our research, policy analysis, and state and national advocacy efforts, as well as in our programs work in communities nationwide.
We partner with Affiliates across the country to serve millions of Latinos in the areas of civic engagement, civil rights and immigration, education, workforce and the economy, health, and housing. We believe in fighting for our community and for an America where economic, political, and social advancement is a reality for all Latinos.
