WASHINGTON вЂ“ U.S. Senate Democratic Whip Dick Durbin (D-IL), a longtime champion of legislation to rein in the predatory payday lending industry, today submitted testimony into the home Financial solutions Subcommittee on Consumer Protection and banking institutions hearing on ending financial obligation traps into the payday and dollar credit industry that is small. The subcommittee will talk about the Protecting customers from Unreasonable Credit Rates Act of 2019, a bill Durbin reintroduced yesterday that could get rid of the extortionate rates and high charges charged to customers for payday advances by capping rates of interest on customer loans at a percentage that is annual (APR) of 36 percentвЂ”the same restriction currently set up for loans marketed to armed forces service – members and their own families.
Comprehensive text of Durbin’s prepared testimony is available below:
Chairwoman Waters, Subcommittee Chairman Meeks, people in the subcommittee: many thanks for permitting us to submit testimony with this consumer protection issue that is important. We understand that almost 12 million cash-strapped Americans are charged rates of interest surpassing 300 per cent for payday advances, and that the payday financing industry gathers about $8 billion in charges every year because of this.
But there’s two figures that actually tell the storyline concerning the payday financing industry in my situation: вЂњ75 per centвЂќ and вЂњ10вЂќвЂ”75% of most costs gathered because of the cash advance industry are produced from borrowers who’ve been forced to renew their loans more than 10 times in a provided 12 months simply because they lacked the capability to repay the total loan. These numbers make a very important factor clear: the payday financing business design was designed to trap consumers in never-ending rounds of financial obligation that may end in severe and irreparable harm that is financial. (more…)