June 15, 2016
On June 2, 2016, the Consumer Financial Protection Bureau unveiled a proposal for a new federal rule on payday and car title lending. The Florida Conference of Catholic Bishops joined with the Florida Alliance for Consumer Protection and other advocates to praise the proposed rule as a good start to addressing unscrupulous lending practices. However, additional work needs to be done to ensure the rule truly protects communities from predatory lenders.
Marketed as a way to meet short-term financial needs, fees quickly add up to far more than the amount borrowed. According to a
by the Center for Responsible Lending, payday and car title loans with interest rates that average more than 300 percent drain $311 million in fees annually from the pockets of Floridians who can least afford it. Pope Francis has called this type of lending a "dramatic scourge in our society" that "harms the inviolable dignity of the human person."
If changes are made to remove exemptions and close loopholes before the rule is finalized, there is a potential to protect vulnerable consumers facing financial hardship from being trapped in a cycle of debt.
The rule will be finalized in approximately 90 days. In the meantime, consumers are encouraged to comment and suggest changes to the final rule. Comments can be submitted at