Payday Loans Hurt Maine Families

Predatory payday lenders devastate hardworking families, financially strain our communities, and deliberately target women, senior citizens,  minority families, and veterans and members of our armed forces. Now, Congress is threatening to take away new federal protections aimed at reigning in abusive lenders. Congress is even considering a bill that would gut Maine’s strong state consumer finance protections. 

New Protections Released, but Under Threat 

The Consumer Finance Protection Bureau (CFPB), the federal agency responsible for regulating banks and lenders, has released a new set of protections designed at reigning in predatory payday lenders. The rules impose commonsense limitations on payday lenders who deliberately trap borrowers into long-term debt because they cannot afford to repay the high-cost loan.

Important safeguards now in place include:

  • Requiring payday lenders to determine whether a borrower can afford to repay the loan—a routine practice already required of banks, credit unions, and credit card companies.
  • Limiting the number of payday loans lenders can issue in a set period of time.
  • Requiring that borrowers with existing loans have a declining balance on their principle before the payday lender can issue another loan.
  • Prohibiting lenders from accessing a borrower’s bank account to garnish their repayment after two unsuccessful tries.

Click here to view new requirements on payday lenders.

But even before the rule is released, the payday loan industry and its supporters in Congress have attacked. We need your help to call on Congress to let the CFPB finish its job of implementing a strong rule on payday lending. Read more here and here.

What You Can Do

Call Your Congress Member 

Payday lending lobbyists have been so successful because they have spent millions on campaign contributions for elected officials across the country. We believe Maine’s elected officials want to stop predatory lending but they need to know you’re listening and watching. They need to know you care about this issue. Call or write your Congress Member and tell them to let CFPB do its job. Here are some facts and figures and some key points to say to them.

Call the Defend CFPB Hotline and be connected directly to Maine Senators’ offices so you can ask them to Defend the CFPB! 

Defend CFPB Hotline: 888-789-9078 

Senator Susan Collins 

413 Dirksen Senate Office Building 
Washington, DC 20510 
Main: (202)224-2523

Senator Angus King  

133 Hart Building 
Washington, D.C. 20510 
(202) 224-5344 

Representative Chellie Pingree  

2162 Rayburn House Office Building 
Washington DC 20515 
(202) 225-6116 

Representative Bruce Poliquin 

1208 Longworth House Office Building 
Washington DC 20515 
(202) 225-6306

What Your Nonprofit Organization Can Do 

Sign on to MECEP’s joint letter to Congress Members asking them to support the CFPB’s rule (contact jharris[at]mecep[dot]org.

Write letters to the editor with your stories about how strong payday lending rules could have kept your members out of a long-term debt trap

Promote the need for a strong rule on social media

Ask your board of directors and membership to call their Congress Member and urge them to protect the CFPB and its payday lending rule

Not Your Father’s Payday Loans 

Payday loans are short-term, high-interest, unsecured loans and called “payday” because borrowers typically took out a small loan to cover emergency expenses until their next pay check. Today, however, payday borrowers use loans to cover normal, recurring household expenses. With usurious fees and interest rates, borrowers are often unable to repay the loan at the end of the week and so take out another loan and then another, getting trapped in a cycle of debt. 

Predatory Lending: Designed to Trap Consumers in Debt 

Consumer Protections Against Unfair Financial Practices Under Attack 

The president and Congress continue to work to weaken the federal government’s ability to protect us from predatory lenders. 

Read about Congressman Poliquin’s attacks on the Consumer Financial Protection Bureau

More to be Done

  • The CFPB should follow through on plans to address the harms of long-term payday lending, which create a longer, deeper debt trap for borrowers.
  • Congress should enact a rate cap on payday loans. Usury caps are the most efficient and effective way to stop debt trap lending, protecting against both short-term and long-term payday and car title lending.
  • Our state must reject any push by payday lenders to loosen our state laws that would enable them to make triple-digit, long-term loans.  
  • CFPB must also vigorously monitor and enforce today’s rule to protect against evasion by payday lenders notorious for skirting laws that aim to rein them in.

Learn More – Forced Arbitration

Predatory payday lenders are trying to keep consumers from banding together in class action lawsuits. Read more.

Learn More – Student Loan Servicing Abuses

With the explosion of student debt also comes the private interests who exploit it. Predatory practices by student loan servicers — those companies that manage payment plans and collect on debt owed — force many former Maine students to pay more than they have to and cheat them into delinquency or default. Read more.