U.S. Catholic Bishops Deplore End Of Federal Payday Loan Limits
“We must work so that those facing financial difficulties are confronted with economic policies that promote the dignity of the human person and the pursuit of the common good. We encourage the US Congress to take action to protect consumers and limit predatory lending, ”he concluded.
The payday loan industry lobbied for the rules to be repealed; the CFPB found that the industry collects between 7.3 and 7.7 billion dollars annually from practices that would have been banned.
The CFPB said the “legal and evidentiary bases” for the rules, announced in 2017, were “insufficient”. According to the bureau, the cancellation “will help ensure the continued availability of low-value loan products to consumers who request them.”
Kathy Kraninger, Director of CFPB, said on July 7 that “our actions today ensure that consumers have access to credit in a competitive market, have the best information to make informed financial decisions, and maintain key protections without hampering this. access.”
According to Representative Glenn Grothman (R-WI), 12 million Americans take out payday loans per year, at an average interest rate of 391%.
Grothman is a partner in the Fair Credit for Veterans and Consumers Act of 2019, a bill that would limit the interest rate on payday loans and car titles. The bill would extend the 2006 rate cap on military loans – which only covers serving military personnel and their families – to all consumers. It would cap all payday loans and car titles at a maximum annual interest rate of 36%.
Several states have already capped the interest rate at 36% or less.
The Church has consistently taught usury to be evil, including in many ecumenical councils.
In Vix perverts, his encyclical of 1745 on usury and other dishonest profits, Benedict XIV taught that a loan contract requires “that one returns to the other only what he has received.” Sin is based on the fact that sometimes the creditor wants more than he has given. Therefore, he claims that a gain is owed to him in excess of what he lent, but any gain that exceeds the amount he gave is illegal and usurious.
In his address to the General Audience on February 10, 2016, Pope Francis taught that “the scriptures constantly urge a generous response to requests for loans, without doing small calculations and without charging impossible interest rates,” citing Leviticus.
“This lesson is still relevant today,” he said. “How many families there are in the street, victims of profit … It is a serious sin, usury is a sin that cries out in the presence of God.”