FCCB Supports Protections for Vulnerable Consumers

Our faith tradition teaches that exploiting people who live in poverty is theft and that usurious practices are the equivalent of indirect homicide ( Catechism of the Catholic Church, nos. 2409 & 2269). Currently, lenders that provide "installment loans" in Florida can require borrowers to pay back the loan in one lump sum, rather than allowing payment installments. Borrowers are often unable to pay back the borrowed amount in one lump sum and are forced to re-borrow the same principal amount for additional interest and fees, leading to a cycle of debt. Many borrowers then lose the family vehicle on which they depend when used as collateral. In an effort to protect vulnerable consumers, the FCCB supported SB 1478, filed by Senator Audrey Gibson (D-Jacksonville), in the Banking and Insurance Committee where it passed unanimously on March 16. This bill requires a six-month loan term with no prepayment penalty, striking a balance between providing enough time for the borrower to reasonably pay off a loan but not such a long term that the borrower pays an excessive amount of interest.