Attorney General Dana Nessel urged the Federal Consumer Protection Financial Bureau, CPFB, to take immediate action to protect consumers from abuses in payday lending.
The joint letter sent by a coalition of 23 states and the District of Columbia, cites the CPFB’s own findings that show the many ways the short-term payday and title lending model is broken.
“My office has a responsibility to act when Michiganders are at risk of deceitful and abusive business practices,” Nessel said. “By delaying these protections, more consumers risk becoming victims of predatory and misleading tactics by payday lenders, and that’s more than enough reason for Michigan to step in and speak out.”
The CPFB announced a new rule in 2017 that would help protect borrowers and ensure they would have the ability to repay loans while also prohibiting lenders from using abusive tactics when seeking repayment. CFPB is now proposing to further delay compliance until Nov. 19, 2020 as well as reviewing another rule that would repeal the law altogether.
The CFPB found 20 percent of payday loan sequences, loans that are rolled over or followed by another loan in close succession, end in default and 33 percent of single-payment auto title loan sequences end in default.