We’re going to Orlando this year for the 2016 NCLR Annual Conference. While the Sunshine State has many attractions to offer its visitors and residents, payday loans are not among them.
Readers of our “Truth in Payday Lending” series may recall a report that NCLR released with the Center for Responsible Lending that examined the failure of a state law that was designed to curb the negative effects of payday loans. The report shows payday lenders have stripped a staggering $2.5 billion in fees from Floridians since 2005. In 2015 alone, their shady lending practices yielded more than $300 million for the industry.
Despite the passage of Florida’s regulation—the Deferred Presentment Act, passed in 2001—trends that are typical of the payday loan debt trap are present in Florida: high fees, exorbitantly high annual percentage rates (APR) averaging 278 percent, and borrowers who are stuck in cyclical debt, with 83 percent of loans going to people who have taken out seven or more per year. Further, the report finds that payday lending businesses concentrate in communities of color, preying upon communities who often lack access to mainstream financial services.
This year’s Annual Conference will feature a way for attendees to help make sure that predatory practices become a thing of the past.
The NCLR Advocacy Central booth will feature the “Stop the Debt Trap” campaign, complete with a comment card that people can use to voice their support for the Consumer Financial Protection Bureau’s (CFPB) proposed payday rule. While some in Congress are pushing the CFPB to consider Florida’s regulations as the basis for a federal counterpart, we believe that the payday lending industry needs much stronger regulations than what these lawmakers are advocating for.
We are calling for a rule that will:
- Make affordability the standard for all loans, without exception.
- Not allow loopholes for lenders to choose how they are regulated.
- Require lenders to consider a borrower’s ability to repay before providing a loan.
- Prevent borrowers from taking on too many loans too quickly.
And at Advocacy Central, attendees can also take a selfie with the payday Pit of Despair (just don’t fall in!).