October 5, 2017 - Latino Leaders Applaud New Payday Lending Rule to Close Loopholes on Predatory Practices

October 5, 2017

LATINO LEADERS APPLAUD NEW PAYDAY LENDING RULE TO CLOSE LOOPHOLES ON PREDATORY PRACTICES

WASHINGTON, D.C. – The National Hispanic Leadership Agenda, a coalition of 45 of the nation’s preeminent Latino advocacy organizations, welcomes the new payday lending rule released today by the Consumer Financial Protection Bureau (CFPB) that would curb predatory lending practices that have trapped countless Latino working families in a cycle of debt by requiring lenders to determine upfront whether people can afford to repay their loans.

The CFPB rule announcement comes after the conclusion of their public comment period and weeks of peer review conducted by other financial agencies. Throughout the months-long comment period, NHLA member organizations engaged our community, which demonstrated strong support for a payday rule. Thousands of comments from the Latino community were collected at UnidosUS’ Annual Conferences in 2015 and 2016, adding to the more than 400,000 comments submitted by the broader coalition. NHLA also joined these efforts and submitted comments in support of a strong rule for the abusive industry.

The engagement of our community in the rulemaking process is not a surprise given that Latinos and other communities of color have been heavily targeted by both storefront and online payday lenders. Studies have shown that race and ethnicity are leading determining factors when payday lenders select the physical locations of their stores. Additionally, a recent poll by UnidosUS shows clear support among Latino voters for these types of consumer protections. A majority of Latinos voters (68%) believe payday lenders take advantage of vulnerable people and a greater share (81%) agree that financial companies should be held accountable with tougher rules and enforcement.

“The Consumer Financial Protection Bureau took an important step today to protect consumers from unscrupulous lenders who trap working families, many of them Latino, into a growing cycle of debt. Director Cordray and CFPB staff deserve praise for the work they have done to protect Latino families & all working families in the nation,” said Hector Sanchez Barba, Chair of NHLA and Executive Director of the Labor Council for Latin American Advancement.

“We are very pleased to see the CFPB take long-awaited action against an industry that preys upon working families which has resulted in devastating financial consequences, especially in communities of color. We are grateful to CFPB Director Richard Cordray and his team and the millions of people all over the country who weighed in with the Bureau to make this happen,” said UnidosUS President and CEO Janet Murguía. “Clearly, more needs to be done to rein in these uniquely unscrupulous lenders. States can push for interest rate caps to complement the CFPB’s rule and play an even greater role in ensuring consumers do not fall into debt traps. But today’s rule is a step in the right direction, but more can certainly be done to close loopholes and provide more robust oversight, given that a vast majority of Americans support oversight and rules that help protect consumers.”

“We welcome the CFPB’s new protection to curb abusive payday lenders—an industry that has gone unregulated for too long,” said Bruce Goldstein, Co-chair of the NHLA Economic Empowerment and Labor Committee President of Farmworker Justice. “CFPB’s rule is a critical step in ensuring that farmworkers and all rural Americans are protected from payday loan’s evil cycle of debt.”

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ABOUT THE NATIONAL HISPANIC LEADERSHIP AGENDA

The National Hispanic Leadership Agenda is composed of 45 of the leading national and regional Latino civil rights and public policy organizations and other elected officials, and prominent Latinos Americans. NHLA coalition members represent the diversity of the Latino community – Mexican Americans, Puerto Ricans, Cubans, and other Latino Americans. NHLA’s mission calls for unity among Latinos around the country to provide the Latino community with greater visibility and a clearer, stronger influence in our country’s affairs. NHLA brings together Latino leaders to establish policy priorities that address, and raise public awareness of, the major issues affecting the Latino community and the nation as a whole. For more information, please visit: www.nationalhispanicleadership.org.

NHLA MEMBER ORGANIZATIONS