This press release was originally posted through Allied Progress. Allied Progress is now Accountable.US.
Washington D.C. – As millions of Americans have already reported losing their jobs in the wake of the coronavirus outbreak, Trump administration financial regulatory agencies including the Consumer Financial Protection Bureau have issued guidance urging financial institutions to offer their ‘adversely affect[ed]’ customers new loan structures, including single-payment loans (i.e. payday loans). Derek Martin, director of consumer watchdog group Allied Progress issued the following in response:
“In the face of a historic economic crisis, what CFPB Director Kraninger should be doing is implementing new emergency measures to combat price-gouging and financial scams. Instead, the Director’s big idea is for banks to issue what amount to payday loans where the sky’s the limit on interest rates. Commercial banks may not choose to charge rates as high as 400 percent for small-dollar loans, but there’s nothing stopping them from getting into the triple digits, as some legitimate banks already have through rent-a-bank schemes. Once banks go down this dark path, it will be hard to go back. The Trump administration should not view this crisis as an opportunity for wealthy special interests to cash in. If they do, it’s all the more important for the next Congressional stimulus package to include a national rate cap so that more hurting Americans aren’t taken advantage of.”