NACA urges the Consumer Financial Protection Bureau not to rescind the ability to repay provision from its 2017 rule on payday loans and to implement the rule as written.
NACA joins organizations in supporting the Senate and House companion bills, S. 1659/H.R. 3760, the “Protecting Consumers from Unreasonable Credit Rates Act,” sponsored by Senator Richard Durbin, Senator Jeff Merkley, Representative Matt Cartwright, and Representative Steve Cohen. The Senate and House bills would extend to all consumers a 36 percent usury APR cap. A fair rate cap will protect consumers by curbing abuses in the high-cost small dollar loan market, while permitting responsible lending on reasonable terms to continue. A strong rate cap also has strong public support, with a large majority of the public consistently supporting interest rate caps on payday, car title, and other high-cost loans.1
The nation's largest banks charge customers overdraft fees averaging $35 per transaction, often adding up to hundreds of dollars per day. The most common triggers of overdraft fees are small debit card transactions-which cost the consumer nothing when they are simply denied due to lack of funds. Consumer groups call on the Office of Comptroller of the Currency to end abusive overdraft practices.
The Restoring America's Commitment to Consumer's Act is an important piece of legislation because it stops the credit card industry's practice of imposing abusive interest rates and fees. By capping credit card interest rates at 16% and limiting the amount of fees charged to consumers, HR 4300 helps end the cycle of debt that burden so many American families.
Overdraft loans cost consumers nearly $24 billion each year and are typically charged without consumers’ explicit consent. Fee-based overdraft coverage is, by far, the most expensive way to have an overdraft covered. But financial institutions typically automatically enroll their customers into this coverage, rather than encouraging them to choose among lower cost options. Often, these financial institutions then manipulate the order in which they post transactions, which further maximizes fees.
We, the undersigned civil rights, labor, consumer, housing and community groups, write to thank the Federal Reserve Board for bringing attention to abusive overdraft practices while urging you to choose the far stronger opt-in proposal.1 For a rule addressing fee-based overdraft to adequately protect consumers, it must at a minimum require institutions to obtain consumers’ affirmative consent. An opt-out arrangement will do little to alter the status quo.
The undersigned consumer, civil rights, small business, investor, community and labor organizations representing tens of millions of Americans strongly urge you to vote for H.R. 627, the Credit Cardholders' Bill of Rights Act (Rep. Maloney), when it is brought to a committee vote as early as this Wednesday, 1 April 2009. The bill passed the House on an overwhelming 312-112 vote, as HR 5244, in September 2008. It enjoys broad public support.
Legalizing payday lending at triple digit interest rates runs counter to President Obama’s promise to cap payday and other loans at 36 percent annual rates and to existing protections provided by Congress to Service members and their families.
Testimony of Twelve Consumer and Community Groups On HR 627 and HR 1456 Before the Subcommittee on Financial Institutions and Consumer Credit by Travis Plunkett of the Consumer Federation of America and Edmund Mierzwinski of U.S. PIRG.