fresh voices from the front lines of change







The stories are endless.

● A woman in Wisconsin cashed out her retirement savings of $28,000 to help her daughter get out from under a payday loan that started as just a few hundred dollars to help pay the bills.

● A man in Alabama took out a title loan for $400 to pay the copay on his wife’s medicine. He paid $100 a month for nine months, but it only paid down the interest. When he missed a payment on the tenth month, the lenders took his truck.

● A veteran in Virginia ends up homeless after getting caught in the cycle of debt.

● A father in Oregon takes his own life after payday lending debt costs him his home.

These stories are just the tip of the iceberg. National People’s Action, our partners and our affiliates organizing on the ground have gathered hundreds of stories like these from communities all across the country – and they just keep coming.

Every year, the predatory payday loan industry traps 12 million hardworking Americans in a crushing cycle of debt. A typical payday loan takes up to one-third of a borrower’s paycheck, with interest rates that average 391 percent APR, leaving folks little choice but to borrow again. In fact, more than 94 percent of payday loan borrowers borrow again within a month. Half borrow again the same day.

This Thursday after years of organizing from grass roots community organizations, there is new light at the end of the tunnel. In Kansas City, the Consumer Financial Protection Bureau (CFPB) is releasing the first-ever proposed federal rules on the payday, car title, and payday installment lending industry. (You can watch the event live at 10 a.m. CDT). This is a historic milestone for communities shackled in debt by this industry, but it isn’t the end of the road; it’s the beginning of the next stage in the fight against the payday predators.

Over 500 community leaders, faith leaders and payday loan survivors will be in Kansas City to let the CFPB know that we’re counting on rules that will truly protect our communities. National People’s Action (now People’s Action Institute), PICO National Network, Americans for Financial Reform, Center for Responsible Lending and other members of the Stop the Debt Trap Coalition are standing strong against this abusive and deceptive industry and calling for rules that are strong enough to stop the debt trap once and for all.

We know this fight has just begun.

The proposed rules come after years of grass roots pressure – and nasty pushback from the industry, which has been bankrolling politicians and lobbyists to the tune of $13 million in an effort to sabotage common-sense consumer safeguards. Since the CFPB began its rule-making process last March, these loan sharks have stripped more than $10 billion from families struggling to get by.

Our families have waited long enough for rules that rein in payday loan sharks. We have no intention of letting paid industry lobbyists drown out the voices of the millions of payday loan survivors, faith and community leaders, and ordinary families who are raising their voices to demand the kind of payday rule we deserve.

We deserve a payday lending rule that stops abusive and deceptive lending. That means abiding by the simplest tenet of lending: making sure a borrower has the means to pay the loan back. Instead of following this basic principle, payday lenders have based their business on their ability to collect – and collect and collect. Instead of giving borrowers a fair shot at getting out of debt, the industry is predicated on keeping them in debt for as long as possible. It’s the classic story of profits before people – and it has to stop.

A strong rule means stopping the constant loan rollovers and refinances that are the hallmark of the debt trap. It means preventing lenders from snatching money directly from a borrower’s bank account or holding unlimited title to their car.

Abusive lenders have a history of slithering through loopholes. We have a once-in-a-generation opportunity to change the way this industry works and put people before profits, but we need to make sure that the payday lending industry’s checkbook doesn’t lead the CFPB to back down from the strong rules we need – and that our communities are counting on.

The CFPB’s announcement launches a 90-day public comment period on the rules. Join the 600 families who’ve shared their personal stories and the more than 59,000 people who’ve taken action so far. Tell the CFPB to stop the debt trap once and for all.

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