New Pay Day Rule is a Step Forward for Latino Consumers and Businesses
For Immediate Release: October 6th, 2017
SAN ANTONIO, TX —The National Association for Latino Community Asset Builders (NALCAB) applauds the publication of the Consumer Financial Protection Bureau’s (CFPB) Payday Rule, which aims to combat abusive and predatory lending practices that strip economic opportunity in communities across the country. The new rule covers payday, vehicle title, and certain high-cost installment loans.
“We are encouraged by the finalization of this rule, a tool that will help create a more fair lending market, especially for Latino consumers”, said NALCAB Executive Director Noel Poyo.
Payday and other high-cost installment loans are deceptive and burden consumers with debt that they are often unable to repay. With high fees and interest rates that can reach triple digits, borrowers are forced to take out loan after loan trapping them in a vicious cycle of debt.
The issue of payday loans is especially pressing for Latino communities. Research from the Center for Responsible Lending has shown that in California payday lenders are nearly eight times as concentrated in neighborhoods with the largest share of African Americas and Latinos as compared to White neighborhoods. Fees from payday loan products results in the loss of nearly $247 million from these communities each year.
“Today’s action by the CFPB is a key step in the creation of a more equitable lending market. This rule will help stop some of the worst abuses in the payday lending market and is a welcome relief for Latino communities. While this rule may not end abusive lending practices altogether, it is a significant step. We look forward to supporting the CFPB in the future as it works to strengthen this rule and other consumer protection measures” concluded Poyo.
A fact sheet on the rule is available at CFPB’s website. For more information on NALCAB’s position on this issue, contact Ileana Gonzalez at (210) 455-4389