In case you missed it, the Greensboro News & Record hit a home run earlier this week with a powerful editorial condemning the Trump administration’s latest effort to aid the predatory payday lending industry.
As the authors put it in “Keep payday loans out of NC”:
No time would be a good 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 those down on their luck could be devastating.
We’ve fought this battle before. Legislators banned the practice here back in 2001. But lenders, who are crafty and resourceful, have kept finding ways to creep back in. They would find loopholes. Out-of-state lenders lured borrowers with online loans. Lenders offered loans secured by the borrower’s car title. They set up shop on Native American reservations. They partnered with out-of-state banks to get around North Carolina law.
One way or another, they’d pop up again, like villains in some 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 seem legitimate, and the efforts of the Obama administration to rein these predators in, the editorial concludes like this:
The Trump administration lost little time in reversing [Obama-era efforts]. It killed rules that were supposed to make payday lenders verify that borrowers could reasonably pay back loans. It blocked efforts to limit lenders’ attempts to pull money out of borrowers’ bank accounts. It refused to limit the number of times a loan could be rolled over.
Now a new federal rule proposed by the Office of the Comptroller of the Currency in the Treasury Department would allow predatory lenders to partner with out-of-state banks to get around the state’s interest-rate cap. The federal rule could outweigh the state law, undoing 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 in fighting it.
North Carolina wisely has worked hard to block payday lenders. We’ve made a lot of progress and helped a lot of people. A reversal now would be a costly mistake.
Click here to read the entire editorial.