SACRAMENTO — California's attorney general has criticized the Consumer Financial Protection Bureau's (CFPB) recent reversion of its Payday, Vehicle Title and Certain High-Cost Installment Loans rule, arguing the rule protects against predatory lending.
“It is senseless for the CFPB to scrap a rule that prevents harms associated with predatory lending,” California Attorney General Xavier Becerra said in a statement. “This rule was intended to protect Americans from abusive and unfair practices by greedy payday and auto title lenders.
"These lenders take advantage of the most vulnerable – hardworking families, seniors and people with disabilities. The CFPB should do everything in its power to keep people from getting caught in a rigged debt cycle, not pander to threats from the very lenders it is meant to regulate.”
According to Becerra's office, the state's Department of Business Oversight reports that borrowers in California paid more than $436 million in fees in 2017. More than 70 percent of the fees were paid by borrowers who took out at least seven loans. More than half of "payday loan" consumers who borrowed in 2017 averaged $30,000 or less in annual average income, the Attorney General's Office said.