Last December, Senators Grassley and Ernst had a chance to stand against predatory payday lenders and stand with hardworking Iowans. Instead, Grassley and Ernst voted to confirm Kathy Kraninger to run the Consumer Financial Protection Bureau (CFPB), the federal regulator charged with policing Wall Street and predatory lenders.

After just two months on the job Kraninger is proposing to gut consumer protections against payday lending which Richard Cordray’s CFPB spent 5 years working to craft. Kraninger wants to eliminate a requirement that payday lenders confirm that a borrower can repay a loan while managing other expenses as well.  The CFPB’s own research found that 80 percent of payday loans are taken out to pay back earlier payday loans.

She isn’t doing this because they are popular, as payday lenders are despised by Democratic and Republican voters alike. Payday lending costs Iowans millions of dollars per year, and the average payday loan-consumer in Iowa has taken out 20 or more, usually just to pay back their earlier debts.

If there was ever a time for Grassley and Ernst to stand up for working Iowans, it was in December when considering who would head the CFPB. And now that Kraninger is pushing to let payday lenders operate like it’s the Wild West, Grassley and Ernst could speak out against the proposal.

But so far not a peep. Thankfully we have a chance to weigh in, as the CFPB has a comment period before they make a final decision. Please submit a comment. And then, let Grassley and Ernst know that they missed a chance to stand with everyday Iowans by confirming someone who would rather protect predatory loan sharks than their victims.

Iowa leaders weigh in onConsumer Financial Protection Bureau (CFPB) proposed action on payday lending industry

On March 26, the CFPB held a field hearing on proposed rules to address the payday loan industry and other small dollar lending institutions such as car title lenders.

The action by the CFPB is the first federal action concerning such lenders since the 2007 act that prohibited payday lenders from taking advantage of members of the military with triple digit interest rates.

In response, and in solidarity with opinion leaders across the country, numerous Iowans weighed in on the rule-making unveiled by the CFPB:

Payday lenders continue to prey on the most vulnerable of society.  It’s time to bring true protection to those that the industry has gorged themselves on for way too long. -Steve Abbott, president, Communications Workers of America – Iowa State Council

 

Payday lenders are like the wild west of financial institutions.  Thankfully there’s a new sheriff in town – the CFPB – who’s committed to bringing some law and order to an industry that’s been left unchecked until now. -Berkley Bedell, former U.S. Congressman

 

I encourage the CFPB to act to protect consumers and families living in or near poverty from predatory financial products, especially payday loans. -Tom Chapman, Iowa Catholic Conference

 

The CFPB needs to be aggressive in its position in regard to payday loan companies.  These folks play on the circumstances, and take advantage of the most vulnerable of our society.  I encourage the CFPB to rein in the abuses of these predators.  -Mark Cooper, president, South Central Iowa Federation of Labor, AFL-CIO

 

For too long predatory lenders have had free rein to take advantage of people when they are desperate and therefore most vulnerable. Every citizen, but especially our military veterans and service members, should not be put in this position. We all deserve better and we applaud any action taken to curb this despicable practice. -Sue Dinsdale, executive director, Iowa Citizen Action Network

 

Payday lenders and the big banks that finance their high interest rates they charge consumers needs to stop.  Their business is nothing more than a modern day cartel.  We should stop protecting these lenders who prey on the anxious middle class by enacting tougher state and federal laws.  In the meantime, the CFPB is the consumer’s only protection. – Jack Hatch, former State Senator and 2014 Democratic Gubernatorial candidate

 

Payday lenders are extremely exploitive in their lending and prey upon working people who struggle paycheck to paycheck.  All too often, hidden penalties lead to garnishments for those that are unable to pay back their $500 loans. The big banks restrict financing to these same people and then loan the money out the back door through another company (e.g., EZ Money). The CFPB needs to find ways to prevent harsh penalties and garnishments. -Joe Enriquez Henry, State Director, League of United Latin American Citizens – Iowa

 

Payday lenders have operated in the shadows for far too long, and it’s about time we had a “cop on the beat” that’s looking out for everyday folks across the country and cracking down on predatory loan sharking that rivals mobster behavior. We applaud this effort by the CFPB and urge them to be as bold as their charter allows to regulate this toxic industry. -Cherie Mortice, board president, Iowa Citizens for Community Improvement

 

Every way you look at it payday lenders are bad for our communities.  Their whole business model depends on families getting caught into a vicious debt cycle, renewing loans over and over again. We as a country can be and are better than this. We can create just alternatives for our neighbors. -Chris Schwartz, Organizer, Americans for Democratic Action

 

Payday lenders don’t help Iowa families build wealth, they bleed our communities dry.  In the absence of state legislation, it’s refreshing to see the CFPB take a stand for people here in Iowa and across the country -Matt Sinovic, executive director, Progress Iowa

The Iowa state legislature has failed to pass meaningful reform to the payday loan industry in recent years despite a broad coalition of groups, representing Republicans and Democrats alike, rallying behind measures in both the Senate and House. In the absence of state legislation addressing the worst abuses of payday lenders, Iowa CCI members and others see action by the CFPB as a needed step in the right direction.

 

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Thanks for your work to focus #SharkWeek on the financial sharks we all want to stop!

Your signatures called on the Consumer Financial Protection Bureau (CFPB) to issue broad and strong regulations on the consumer lending industry. Payday and installment lenders rip off  hardworking Americans everyday by charging outrageous interest rates  – often exceeding 300 or 400%!

Didn’t sign yet? Find the petition here!

That’s why we dedicated Shark Week to telling the stories of loan sharks and payday borrowers. The newspapers ate it up; check out the coverage!

The Hill: Activists to unleash ‘Shark Week’ attack on payday lending industry

The Nation: This week, Look At the Real Sharks: Payday Lenders

Yahoo Finance: Payday lenders face scrutiny for abusive lending

Yahoo Finance: The reign of payday lenders may soon be over

Chicago RedEye: ‘Shark Week’ protests fishy lenders

#SharkWeek didn’t end when Discovery’s Shark Week ended – the week’s activities were complimented by an in-depth investigative series on payday lending’s devastating effects on families in Iowa. All of this culminated in the first ever Des Moines Register editorial on the payday lending issue and the need for lawmakers to take bold action!

Des Moines Register: It’s time lawmakers deal with payday loans

Des Moines Register: Payday lenders burying Iowans under a pile of debt

Des Moines Register: Federal action against payday loans picks up

There is still time to make sure the CFPB knows you want strong regulations against this predatory industry. Sign the petition today

Stay tuned for when the legislature comes back into session in January 2015! 

 

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In a unanimous vote Tuesday afternoon, the Dubuque City Council passed an ordinance to restrict where new payday lenders can locate.

Dubuque became the ninth city in Iowa to pass an ordinance!

The ordinance, modeled after ordinances passed in Iowa City and Ames, will severely restrict where any new lender can locate within the city.

Karla Braig, Dubuque City Council woman said during the city council meeting on Monday, “I’m proud we’re going to add Dubuque [to the list of cities with ordinances]”.  She also said she hopes Dubuque sends a message to the legislature to “get off their behinds” and do something to crack down on payday lenders. A similar sentiment was stated by other city council members.

The state legislature, not cities, has the authority to regulate interest rates on payday loans, which currently average just under 400% APR. Despite strong grassroots support for interest rate caps, the legislature has failed to bring a bill to the governor’s desk. This leaves cities to address the problem through zoning, with Davenport next on the list of cities poised to take action.

Des Moines was the first city in Iowa to pursue ordinances to control the growth of payday lenders in May of 2010. Since then, the state has seen over a 20% decrease in payday lenders operating in Iowa.

CCI members will continue to push for interest rate caps on payday loans at the state level in next year’s legislative session. Until then, CCI vows to pursue all tools, including zoning ordinances, to curb the abusive practices of payday lenders.

 What can you do right now?

Sign this petition to stop more payday lenders!

The Consumer Financial Protection Bureau is currently considering new rules for the consumer credit industry – they have the opportunity to crack down on the worst abuses of the payday, installment, and car title loan sharks.

Sign the petition telling CFPB Director Richard Cordray we need rules that are broad enough to cover the whole industry and strong enough to crack down on the worst abuses.

Take action now, and stay tuned for the next step!

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Payday lending fees cost everyday Americans $3.4 billion every year, including $37 million in Iowa

 

Iowa CCI members call on Iowa legislators to take action by passing interest rates caps

 

The Center for Responsible Lending just released a scathing report about payday lenders and the predatory nature of their high fees and interest rates in the United States, and found that payday lending fees – above and beyond the original loan amount – cost everyday, hardworking Americans $3.4 billion every year. http://www.responsiblelending.org/state-of-lending/reports/10-Payday-Loans.pdf

In Iowa alone, individuals paid over $37 million in fees in 2012. According to the report, there are 218 payday loan operations in Iowa. Each one averages 3, 904 transactions every year.

Iowa is one of 29 states without meaningful regulation, despite popular public support of regulation of payday lenders. Payday lenders trap people in a cycle of debt, near impossible to escape. 90 percent of payday borrowers go to individuals with 5+ loans per year. Fees and penalties add up to an annual interest rate near 400 percent.

Lacking legislation at the Iowa Statehouse, cities have taken action under the leadership of local Iowa Citizens for Community Improvement (Iowa CCI) members. Seven cities – Des Moines, West Des Moines, Clive, Ames, Iowa City, Cedar Rapids and Windsor Heights – have already passed local ordinances that restrict where payday lenders can locate. Since the first ordinance was enacted, we have seen an almost 20% drop in payday loan shops in Iowa.

The Center for Responsible Lending states the strongest approach to regulating payday lenders is setting maximum APRs to eliminate the debt trap, generally 36 percent. For years, Iowa CCI members have pushed Iowa legislators for legislation to cap interest rates at 36 percent but legislators in both parties have failed to act.

“I have young family members who have taken out these loans and have gotten trapped in a cycle of debt,” said Robin Ghormley, an Iowa CCI member from Des Moines.  “It is outrageous that all of this money is going to out of state corporations and I think it’s past time that Governor Branstad and the Iowa legislature crack down on predatory payday lending by passing strong interest rate cap legislation during the 2014 session.”

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In a unanimous vote Tuesday afternoon, the Cedar Rapids City Council passed an ordinance to restrict where payday lenders can locate. Cedar Rapids became the sixth city in Iowa to pass an ordinance.

The ordinance, modeled after ordinances passed in Iowa City and Ames, will severely restrict where any new lender can locate within the city.

Darrel Wrider, Cedar Rapids resident and CCI member, hailed its passage. “I’m pleased the Cedar Rapids city council is working to crackdown on predatory payday lenders. This ordinance is a good first step in curbing their growth. It is my hope the Iowa state legislature will act next session and truly address the abusive practices of the payday lending industry by passing a statewide interest rate cap.”

The state legislature, not cities, has the authority to regulate interest rates on payday loans, which currently average just under 400% APR. Despite strong grassroots support for interest rate caps, the legislature has failed to bring a bill to the governor’s desk. This leaves cities to address the problem through zoning, with Dubuque next on the list of cities poised to take action.

Des Moines was the first Iowa city to pursue ordinances to control the growth of payday lenders in May of 2010. Since then, the state has seen an 18% decrease in payday lenders operating in Iowa.

CCI members will continue to push for interest rate caps on payday loans at the state level in next year’s legislative session. Until then, CCI vows to pursue all tools, including zoning ordinances, to curb the abusive practices of payday lenders.

 

Join the Fight!