Members to CFPB Director: Crack down on payday lenders, mortgage servicers

Cordray hears from community before public hearing

Members of Iowa CCI and other allies met on the morning of March 28 in Des Moines and sent him back to DC with a broad mandate to crack down on predatory payday lenders and mortgage servicers.

"It's a telling irony - not lost on some of us - that we even need such a bureau, that we need protection from a financial mafia that should be in prison... but instead sits in places of power." -CCI member Judy Lonning

The CFPB and Director Cordray were in Des Moines to meet with grassroots groups tackling predatory lending. CCI, in partnership with other allies, hosted a closed-door meeting to discuss predatory financial institutions and the CFPB's role in holding them accountable. Following the closed-door meeting, CFPB held a public community forum to announce changes to their consumer complaint database to better serve consumers who were wronged and bring to light the predatory lending institutions that are the worst actors in the field of consumer lending.In our closed door meeting, CCI member Cherie Mortice laid out the devastating effects payday loans - both storefront lenders and payday loans pushed by banks like Wells Fargo - have on families and neighborhoods like the one where she lives on the east side of Des Moines.  "I live in a working class neighborhood and it doesn't take much to push these people over the edge," said Mortice.  "Payday loans tear apart the economic stability of neighborhoods like mine, and if we don't have serious regulations placed upon this industry, the people will see this as just another shell game to punt off responsibility."Mortice called on the CFPB to issue sweeping regulations of the payday loan industry, including extending the payback period for these loans due in full on the borrower's next payday, as well as prohibiting the use of Social Security checks as collateral for obtaining a loan to protect the most vulnerable.  She also urged the CFPB to publicly stand with other financial regulators and move immediately to halt big banks like Wells Fargo from offering similar predatory loans to their customers.

CCI member Jess Mazour laid out many of the abuses in the servicing industry she witnessed with her time at Wells Fargo during the height of the recession and foreclosure crisis.  "It seemed impossible for someone to work through the system for help.  I hated telling people sorry your husband got cancer, or sorry you lost your job - but you signed this contract and this is the process.  It seemed so immoral to me." CCI member Larry Ginter called on the CFPB to use everything in their power to clamp down on fraud and abuse in the servicing industry.  He specifically called on them to require all servicers to offer a struggling homeowner a modification in good faith, and most importantly to require them to correct any and all errors made in a modification - something servicers are currently only required to acknowledge, but not correct. "Servicers are experts at what they do," Cordray explained. "It's just that nobody is holding their feet to the fire."Judy Lonning, a CCI member from Des Moines, ended the closed-door meeting by directing the CFPB to fully embrace their work for we the people.  "You and your agency represent hope that things can change.  We need you to go over the heads of the financial elite to address in meaningful ways the grave injustices resulting from a climate where anything that maximizes profits has been regarded as fair game."