The Financial CHOICE Act, Predatory Lending and the CFPB

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On June 13, 2017, the US House of Representatives passed the so-called Financial CHOICE Act. According to an alarm sent out in early June by the Southern Poverty Law Center (SPLC), this Act “would strip away safeguards needed to stop predatory lenders from trapping low-income people in an endless cycle of poverty and debt.” Some “choice,” right?!

This bill does great damage to some of the most vulnerable Americans, according to the SPLC: “The bill before the House would entirely eliminate the [Consumer Financial Protection] Bureau’s authority to regulate this industry. The provision is part of the larger Financial CHOICE Act, which is intended to gut the 2010 Dodd-Frank law that was enacted to reform Wall Street abuses in response to the 2008 financial crisis.”

The SPLC noted further, “These loans trap millions of poor people across America in a nightmare of debt. Often, they’re people who just need a little money to buy food or pay a water bill. In some states, lenders get away with anything and are allowed to charge crippling interest rates – like in Alabama, where interest on a payday loan is 456%.”

As we noted earlier, it is extremely important that Americans keep an eye on any legislation, including President Trump’s budget, that attempts to defang or eliminate the CFPB, which has done a great amount of good for citizens. Massachusetts Senator Elizabeth Warren, who unabashedly waged a “Tweet war” with Trump during the 2016 campaign, was instrumental in establishing the CFPB in the early years of the Obama Administration. Is it any wonder, then, that Trump might wish to dismantle such a successful government agency, with his long history of anger, spite and revenge toward those who stand up to him?…

The bill has not yet become law. Tell your Senator to vote against any dismantling of the CFPB!

 

 

 

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