CFPB Eliminates Consumer Protections from Payday and Automobile Title Loans During COVID-19 Pandemic

CFPB Eliminates Consumer Protections from Payday and Automobile Title Loans During COVID-19 Pandemic

Essential Georgia Usury Cap should really be Expanded to safeguard Consumers through the financial obligation Trap

Yesterday, the customer Financial Protection Bureau (CFPB) eliminated customer defenses against predatory payday and automobile name loan providers, leaving Georgia families confronted with the harms of vehicle name financing. While Georgia’s usury limit provides defenses through the pay day loan debt trap, abusive automobile title lending nevertheless plagues Georgia. Currently, their state doesn't regard this form of predatory lending being a small-dollar loan, but alternatively permits vehicle titles to be “pawned” with interest rates because high as 300 %.

“This could be the worst possible time for you to expose Georgia customers to predatory lenders. The crisis that is economic through the COVID-19 pandemic simply leaves numerous families struggling to have by,” said Liz Coyle, executive manager of Georgia Watch. “To protect Georgians with this financially unstable time, the legislature should implement a 36% limit on all small-dollar loans, including vehicle name and installment loans. We also urge Congress to enact H.R. 5050, a bill to ascertain a strong rate of interest cap to prevent predatory methods throughout the nation.”

In line with the Center for Responsible Lending, vehicle name lending costs Georgia families $199,575,563 each year in abusive charges. Borrowers must make provision for the name of the automobile as security with this high-cost loan, which forces a household determined by that car due to their livelihood to restore the mortgage over and over over repeatedly it off in full — or lose their car to the lender if they cannot afford to pay.Read more