DOWNTOWN Wednesday, October 5, 2016 Cincinnati City Council passed a resolution encouraging the Federal Government to rein in payday lending.
Payday loans in Ohio charge an average of 667% in fees on a $300 two-week loan. In 2015, payday lenders targeted low-income borrowers and drained nearly $502 million from Ohio’s economy.
Communities United for Action (CUFA) offered testimony from victims of payday and car title loans, including testimony from a single mother who took out a $700 loan in July to get her car fixed so she could keep her job. In just two months, the loan escalated to $1,500, and now she is stuck in a cycle of debt.
“City Council’s support of strong rules on payday loans is encouraging,” said CUFA president Marilyn Evans. “In Cincinnati, we need access to small loans that don’t rip people off.”
CUFA is an affiliate of the national organization, People’s Action, which is calling for an end to payday lending. Today People’s Action released a collection of stories about people who have been taken advantage of by payday lenders. To see these stories, including a story from CUFA member Dorothy Lewis, visit www.PeoplesAction.org/DebtTrap/.
The public is encouraged to submit comments to strengthen rules on payday loans. The comment period ends Friday, October 7. To submit comments, visit http://www.cufacincy.org/2016/06/03/act-now-help-strengthen-payday-loan-rule/.
The resolution passed today supports the Consumer Financial Protection Bureau’s (CFPB) rule on payday, car title and high-cost installment loans. The rule proposed by the CFPB would require small dollar lenders to assess the borrower’s ability-to-repay to protect the borrower from accumulating debt. A copy of the City’s ordinance can be found at: http://city-egov.cincinnati-oh.gov/Webtop/ws/council/public/child/Blob/46102.pdf?rpp=-10&m=2&w=doc_no%3D%27201601321%27
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