American Voters Favor a Well-Regulated Payday Lending Industry
The American public has a very low opinion of payday lenders, says a new poll out from the NCLR Action Fund, Americans for Financial Reform, Center for Responsible Lending, and the NAACP. The poll, which comes on the heels of a proposed Consumer Financial Protection Bureau rule to reign in predatory lending, shows Americans see little value in the services payday lenders provide.
The poll, conducted from May 26 to June 1, 2016, surveyed 1,400 registered voters and found that payday lenders represent some of the least popular institutions around. Of those surveyed, only 3% had a favorable opinion compared to a 51% unfavorable rating. This makes them less liked than used car salesmen.
The poll also revealed that voters are highly supportive of increased regulation on the shady lenders. While the Americans surveyed exhibited limited awareness of what a payday loan exactly is (25% said they knew a lot; 21% said they knew some), the poll showed they knew even less about what car title loans are (19% said they knew a lot; 20% said they some) and their potential pitfalls. However, after learning more about both and how they operate, 71% of voters showed a clear preference for increased regulation on payday lending, and 66% said the same about car title loans.
Payday regulations are also a winning issue at the ballot box. Fifty-seven percent of those surveyed said they favored a candidate who pledged their support for payday lending regulations.
On the CFPB’s rule specifically, 73% of voters said they are overwhelmingly in support of reining in payday lenders versus 22%. While a remarkable statistic, the high number can be explained by how a sizable number of the voters view payday lenders. The average payday loan comes with a hefty 400% interest rate, making it nothing more than legalized loan sharking in the eyes of 62% of those polled.
This week’s poll confirms what we have long known about the payday lending industry, and helps build the case for why the CFPB’s proposed regulation is needed. Too many Latinos, and other low-income minorities, have been victimized by these predatory lenders and found themselves caught in a miserable debt cycle. We’ve shared some of their stories in our blog series, “Truth in Payday Lending: Stories from Latino Borrowers.”
Now it’s time to speak up and let the CFPB know you support this proposed rule. Without it, payday lenders will be emboldened to ratchet up their unfair lending practices and consumers will have little in the way of protection to shield them from these unscrupulous operators. The CFPB needs to know Latinos favor strong regulations that put consumers first above the interests of the payday lending industry. Go to stoppaydaypredators.org today to leave a comment expressing your support for a strong regulation that will finally stop the debt trap.
Download a copy here to read all of the results of this week’s poll.
