Effort Will Expose Industry’s Destructive and Underhanded Practices And Encourage Consumer Financial Protection Bureau to Crack Down
WASHINGTON, DC – A new campaign launching today will aggressively target the payday and installment lending industry, calling attention to its predatory practices that line the pockets of lenders by trapping customers in a cycle of mounting debt.
The campaign, launched by Americans for Payday Lending Reform, a project of National People’s Action, will include a significant investment in digital advertising and a new online hub featuring a weekly series highlighting payday “predators of the week,” breaking news in the fight for reform, and other research related to the industry, its players, and practices.
As the Consumer Financial Protection Bureau (CFPB) considers how best to address rampant and longstanding issues with the payday lending industry, the campaign will highlight the need for tough new federal rules that protect consumers from systematic abuse and exploitation that are strong enough to keep payday lenders from avoiding accountability as they have done time and time again.
“The payday lending industry is the worst of the worst — using predatory practices to take advantage of their customers,” said Liz Ryan Murray, policy director at National People’s Action. “Creditors should help build wealth for working families, but payday lenders get rich by profiting off the most vulnerable. Our campaign will expose the ruthless greed and predatory nature of this industry.”
Across the country, 35 states authorize payday lending in some form. While some states and cities have worked to pass local laws capping interest rates, federal laws still largely allow payday lenders to prey on vulnerable communities and benefit from borrowers’ financial hardship.
Payday lenders have been known to use tactics like threats, harassment and intimidation in order to push customers to take out more loans. Earlier this summer, the Texas-based payday lender ACE Cash Express paid $10 million to settle allegations by the CFPB that it had bullied payday borrowers into a debt trap.
Background on Payday Lending:
- Each year, payday lenders make more than $10 billion in fees by trapping an estimated 12 million consumers in a cycle of debt and making it difficult for them escape.
- Payday lenders use threats, harassment, and intimidation to get customers to take out more loans when they are having trouble paying back their previous loan.
- Payday lenders use shady tactics to get around laws designed to protect consumers and promote industry accountability.
- Payday lenders have paid fines for defrauding and harassing their customers.
- There are now nearly as many payday lending storefronts in America as McDonald’s and Starbucks… combined. And many of these locations are in close proximity to communities of color.
First Predator: Ted “Watergate” Saunders of Community Choice Financial
William E. Saunders Jr. has been the Chief Executive Officer of payday lender Community Choice Financial, Inc. since June 2008. Saunders has long fought to block regulation of the payday lending industry and recently equated a supposed federal crackdown on payday lenders with Watergate and called it “government overreach.” He also equated closing payday lending stores with closing hospitals. View more on Ted “Watergate” Saunders here:
Ad Script – “Preyday Lenders” – 30 Seconds
“Twelve million hardworking Americans fall victim to the underhanded business practices of payday lenders every year.
It’s an industry that takes in more than $10 billion dollars in fees annually. Its CEOs get filthy rich by deliberately trapping customers in an endless cycle of debt.
Payday lenders have even been sued for defrauding and harassing their own customers.
These hard-working families need Washington to act. Visit PaydayLendingReform.org to learn more and take action.
Paid for by Americans for Payday Lending Reform, a project of National People’s Action.”
To speak with Liz Ryan Murray at National People’s Action about payday lending, please contact Alec Saslow at 720.319.4948 or Alec@FitzGibbonmedia.com. National People’s Action (www.npa-us.org) is a network of 30 grassroots organizations in 17 states, with 85,000 individual members working together to advance a racial and economic justice agenda for a new economy and true democracy.