CFA and other consumer organizations applaud FDIC and OCC's proposed guidance for banks to stop making predatory loans (Joint Statement)
FDIC and OCC Crack Down on Bank Payday Lending
Joint Statement by the Following:
- Orson Aguilar, Executive Director, The Greenlining Institute
- Laura Berry – Executive Director, Interfaith Center on Corporate Responsibility
- Becky Bond – Political Director, CREDO
- Michael Calhoun – President, Center for Responsible Lending
- Lisa Donner - Executive Director, Americans For Financial Reform
- Tom Feltner - Director of Financial Services, Consumer Federation of America
- George Goehl - Executive Director, National People's Action
- Alisa Gravitz - President and CEO, Green America
- Wade Henderson – President and CEO, Leadership Conference on Civil and Human Rights
- Willard P. Ogburn - Executive Director, National Consumer Law Center
- Janet Murguía, President, National Council of La Raza.
- Matthew W. Patsky, CFA – CEO, Trillium Asset Management, LLC
- Scott Reed - Executive Director, PICO National Network
- Rashad Robinson - Executive Director, ColorOfChange.org
- Joyce Rogers, Senior Vice President for Government Affairs, AARP
- Hilary O. Shelton, Director, NAACP Washington Bureau and Senior VP for Policy and Advocacy
We applaud the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC) for the proposed guidance they issued this week directing banks to stop making predatory loans that trap borrowers in a cycle of debt with 300% interest. Requiring banks to assess a borrower’s ability to repay and make loans that borrowers can afford to repay is just common sense. It is also a fair directive, since banks have received generous government support and currently borrow money themselves from the government at close to 0% interest.
We also are encouraged by the Consumer Financial Protection Bureau’s study of payday lending by banks and store-front lenders, released earlier this week. The CFPB examined extensive data and found that payday loans are repeatedly flipped by lenders at exorbitant interest rates, causing deep hardship to families.
The FDIC/OCC bank guidance, if adopted and fully enforced, would address longstanding concerns expressed by policymakers, advocates and concerned citizens. The banking regulators have heard opposition to bank payday lending from more than 157,000 citizens, 250 organizations, a number of civil rights leaders, and members of the Senate. In addition, several institutional investors have raised concerns about payday lending and its impact on consumers and banks alike.
The FDIC and OCC have been proactive in examining payday lending by banks, listening and investigating, and responding with necessary action. The Federal Reserve Board, which regulates two of the financial institutions currently offering bank payday loans, should do the same.
We welcome the proposed guidance for addressing payday lending by banks, but we also know that non-bank payday lending continues to trap thousands of vulnerable borrowers in debt. We urge the Consumer Financial Protection Bureau to act quickly and decisively to curb payday lending by all types of lenders.
FOR MORE INFORMATION:
- Kathleen Day, Center for Responsible Lending 202-349-1871
- Jack Gillis, Consumer Federation of America 202-737-0766
- Doug Gordon, National People's Action 202-494-5141
- Jonas Kron, Trillium Asset Management, LLC 413-522-2899
- Jan Kruse, National Consumer Law Center 617-542-8010
- Sarah Lane, CREDO 415-369-2104
- Jim Lardner, Americans for Financial Reform, 202-466-1854
- Todd Larsen, Green America 202-872-5310
- Tim Lilienthal, PICO National Network 413-437-0632
- Tiffany Lundquist, AARP 202-434-2563
- Bruce Mirken, The Greenlining Institute 510-926-4022
- Johnny Mathias, ColorOfChange.org 240-422-6724
- Susana McDermott, Interfaith Center on Corporate Responsibility 212-870-2938
- Julian Teixeira, National Council of La Raza 202-785-1670