(NNPA)—After waiting for more than a year for a hearing on a bill that would reform how small dollar loans operate, six U.S. Senators have now taken their concerns to the Consumer Financial Protection Bureau (CFPB. A May 14 letter to CFPB Director Richard Cordray lays out how rulemaking could accomplish much of what proposed legislation has aimed to do.
Speaking in a united voice, Senators Jeff Merkley (Oregon), Dick Durbin (Illiois), Tom Harkin (Iowa), Tom Udall (N.M.), Richard Blumenthal (Conn.) and Elizabeth Warren (Mass.) said, “Sadly, the evidence shows that these loans trap consumers in a cycle of debt in which consumers end up owing more than the initial loan amount—an appalling practice that exploits the financial hardship of hard working families and exhibits a deeply flawed business model that does not consider borrowers’ ability to repay the loan.”
As sponsor and co-sponsors of the pending Senate Bill 172, Stopping Abuse and Fraud in Electronic Lending Act, the lawmakers urged CFPB to include the bill’s provisions in its rulemaking. Despite being assigned to the Senate Banking, Housing and Urban Affairs Committee since January 2013, no hearing has been held on the SAFE Lending Act. Should CFPB embrace the lawmakers’ request, its new rules would achieve many of the same lending reforms.