Both the Virginia Partnership to Encourage Responsible Lending (VaPERL) and the Virginia Poverty Law Center(VPLC) submitted comments this fall on the Consumer Financial Protection Bureau proposed Rule governing payday and car title lending. You can see the full comments here and here. VPLC Comments with borrower Stories VaPERL (Virginia Partnership to Encourage Responsible Lending) Coalition C0mments.
The need for a comprehensive reforms of such loan types and similar loans is needed both at the state and federal level to ensure borrowers are left with loan options that account for their ability to be successful in and after loans. To end cycles of debt caused by loan terms and traps designed to keep borrowers indebted in high rate loans for increasing spans of time.
We are pleased that the CFPB Rule is designed to stop the payday and car title loan debt trap
but the Rule needs to be strengthened. Our goal is to ensure that the first-ever federal rule for small-dollar loans stops the harm payday and car-title loans have caused borrowers for many years and fosters fair and affordable products. Attached to VPLC’s comments are 70 stories of Virginia borrowers that have suffered financial ruin, the anguish of struggling to repay a loan that is designed to be unaffordable, and then the humiliation caused by abusive debt collectors. The VaPERL comments highlight the history of some of the most egregious ways the payday and car title lenders themselves have thwarted efforts to impose reasonable regulations in Virginia. The CFPB Rule is sorely needed to address the enormous harm cause by these loans but the payday and car title lenders will surely find ways to evade this new CFPB Rule unless some of the loopholes in the Rule are eliminated.
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