Idaho Community Action Network (ICAN) on Monday protested what it calls a lack of action by the Consumer Financial Protection Bureau regarding enacting national standards for payday loan operations and ending uncapped loans.
The advocacy group stated that the CFPB hasn’t released a set of rules it began drafting in 2014 to “stop the debt trap and end the worst abuses of payday and car title lending.”
"The process that began in 2014 looked like it was headed in the right direction, especially in March of 2015 when the agency released draft language that addresses the debt trap,” ICAN officials said. "However, two years later we have yet to see these rules. Between the date the draft proposal was released and today, payday lenders have stripped more than $7 billion from our communities in the form of interest payments and fees on loans that are being advertised for two-week emergencies but designed to keep the borrower in debt for months on end."
Miranda Davis, an ICAN member, shared her story during a rally in front of a payday loan outlet in Boise on Monday, according to an ICAN news release.
"I work hard as a single mom and the last thing I needed when I borrowed money was to get trapped in a cycle of debt that was nearly impossible to get out of," she said. "To get out of the trap, my wages were garnished and it hurt my family more than if I had just let my power be shut off.”
The current average annual percentage rate for a payday loan in Idaho is 582%, according to ICAN.
ICAN member Terri Sterling said $64 million a year in Idaho alone could go into local economies but is lost because individuals are stuck paying payday lenders at high interest rates. Local ordinances can help by reducing the number of payday lenders in cities throughout Idaho and not allowing new businesses to come in without first being vetted by the community. Sterling told The Coeur d’ Alene Press on Monday that ICAN has made the issue a priority for three years now and has been advocating for local ordinances, Consumer Financial Protection Bureau action and a 36% rate cap on payday loans."I just want everybody to have access to fair lending and I don't think these payday lenders can do that," Sterling said. "People with poor credit and low incomes are trapped and have no other choice but to take out the payday loan. We're just really pushing cities to limit the number of them because there's just too many. And as other states around us regulate what the industry does, the industry is encouraging people to start more of these businesses in Idaho because we have uncapped rates."