In case you missed it, the Greensboro News and registration hit a home run earlier this week with a powerful op-ed condemning the Trump administration’s latest effort to help the predatory payday loan industry.
As the authors say “Keep Payday Loans Out of NC”:
Now is not the time to let unscrupulous payday lenders start preying on North Carolina residents again. But now – as the COVID-19 pandemic has disrupted jobs and lives – letting payday lenders take advantage of the lucky ones could be devastating.
We have fought this battle before. Lawmakers banned the practice here in 2001. But lenders, who are shrewd and resourceful, have continued to find ways to turn back the clock. They would find loopholes. Foreign lenders have lured borrowers with online loans. The lenders have offered loans secured by the car title of the borrower. They settled on Native American reservations. They have partnered with foreign banks to circumvent North Carolina law.
Somehow they reappeared, like villains in an arcade game.
After documenting the long and tortured history of this so-called industry, the way it manipulates borrowers and tries to make triple-digit interest rate loans look legitimate, and the Obama administration’s efforts to bring it under control these predators, the editorial concludes. :
Trump administration wasted little time to backtrack [Obama-era efforts]. He killed the rules that were supposed to make payday lenders check that borrowers could reasonably repay loans. He blocked efforts to limit attempts by lenders to withdraw money from borrowers’ bank accounts. He refused to limit the number of loan renewals.
Now, a new federal rule proposed by the Treasury Department’s Office of the Comptroller of the Currency would allow predatory lenders to partner with foreign banks to bypass the state’s interest rate cap. Federal rule could trump state law, reversing North Carolina’s progress in banning predatory payday loans.
Officials here say they oppose this latest rule change that could open the door for payday lenders to return. They should spare no effort to combat it.
North Carolina has wisely worked hard to block payday lenders. We have made a lot of progress and helped a lot of people. A reversal now would be a costly mistake.
Click here to read the full editorial.