For more than a decade, civil rights organizations, labor, clergy, and consumer advocates have fought to end triple-digit interest rates on small dollar loans. Whether it was a high-cost installment, payday or car-title loan, the push has been to free America’s working families and consumers of color from fees that can double, or even triple the amount of money borrowed.
Now, after years of research, public hearings and advisory forums, on June 2 the Consumer Financial Protection Bureau (CFPB) announced a long-awaited proposed rule. Speaking before a public hearing in Kansas City, Richard Cordray, CFPB’s director, spoke to the ultimate consumer goal tied to the proposed rule.
“Our proposed rule is designed to ensure more fairness with these financial products by making systemic changes to steer borrowers away from ruinous debt traps and restore to them a larger measure of control over their affairs,” said Director Cordray. “Ultimately, our objective is to allow for responsible lending, while making sure that consumers do not fall into situations that undermine their financial lives.”