FOR IMMEDIATE RELEASE
December 18, 2017
Contact: Lorraine Davis, (701) 214-7911
Congress: Hands Off New Rule Protecting North Dakota Families from Payday Lenders
Bismarck, North Dakota — Ignoring the voices of families and communities who have worked for many years for relief from the harms of predatory payday lending, a handful of members of Congress have introduced a bill nullifying an essential rule finalized by the Consumer Financial Protection Bureau last month.
A bill introduced by Rep. Dennis Ross (R-Fla.) and co-sponsored by Rep. Alcee Hastings (D-Fla.), Tom Graves (R-Ga.), Henry Cuellar (D-Texas), Steve Stivers (R-Ohio), and Collin Peterson (D-Minn.), would kill a long-awaited rule requiring payday to make loans only after they have assessed whether the borrower can afford to pay them back. This is a commonsense measure designed to protect people from being trapped in these high-cost loans.
"I urge Congress to stand with the people and families of North Dakota," said Lorraine Davis, Executive Director of the Native American Development Center, a partner in the North Dakota Economic Security and Prosperity Alliance (NDESPA). "We have worked long and hard to see this rule come into being, and our families deserve the protection. It is the right thing to do.”
A coalition of 700 civil rights, consumer, labor, faith, veterans, seniors and community organizations from all 50 states energized a years-long effort to push the Consumer Bureau for strong protections from predatory payday. The business model relies on repeat borrowing of unaffordable loans; 75% of all payday loan fees are generated from borrowers stuck in more than 10 loans a year.
Payday lending leaves people unable to pay bills, strips them of their bank accounts, and increases the likelihood of bankruptcy. Across the country, payday and car title lending costs families $8 billion per year. North Dakota families pay almost $7 million a year in fees for loans with average annual interest rates of 487%.
“There are many different options out there, such as Community Development Financial Institutions (CDFI), that can provide North Dakotans access to small dollar short-term loans,” said Davis. “We don’t need predatory loans that trap people in 487% interest debt.”
The Consumer Bureau's rule is supported by more than 70% of Republicans, Independents and Democrats.
The Native American Development Center (NADC) is an emerging Native Community Financial Institution (CDFI) providing lending services, financial education, and credit development to Native Americans around the state and to anyone of low-income within our state. By law, 60% of our clients must be Native American. The remaining 40% may be of any race as long as they are qualify as low-income.