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Senator Dick Durbin. The Senators urged the CFPB to pay attention to significant ability-to-pay requirements for small-dollar loans

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WASHINGTON, D.C. – As the customer Financial Protection Bureau (CFPB) considers brand new guidelines to rein in predatory methods in payday and comparable kinds of financing, U.S. Senator Dick Durbin (D-IL) and much more than 30 other Senators expressed their help today for the initial actions the agency has brought and urged the agency to issue the strongest feasible guidelines to fight the “cascade of damaging monetary effects” that these high-priced loans usually have on customers.

The senators wrote: “We support the CFPB’s initial steps towards releasing a proposed rule and urge you to issue the strongest possible rules to end the damaging effects of predatory lending in a letter to CFPB Director Richard Cordray.

“Small-dollar, short-term loans with astronomical interest levels that pull consumers as a period of debt are predatory. These loans have actually high standard prices, including following the debtor has compensated hundreds or 1000s of dollars due to triple-digit rates of interest. … Even in the event customers don’t default on these loans, high rates of interest, preauthorized payment techniques and aggressive commercial collection agency efforts often produce a cascade of damaging monetary effects that may consist of lost bank reports, delinquencies on charge cards as well as other bills, and bankruptcy.”

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