Contact: Max Rosenblum or Tyler Dratch
202.387.2800 | news@rac.org
Washington, D.C., June 2, 2016 – In response to today’s release of proposed rule by the Consumer Financial Protection Bureau (CFPB) regarding payday and car-title lending, Rabbi Jonah Dov Pesner, Director of the Religious Action Center, issued the following statement:
“We welcome the Consumer Financial Protection Bureau’s proposed rule regarding payday and vehicle title loans. The agency’s determination that payday lenders must consider their customers’ ability to repay a loan, while meeting their essential living expenses, is common sense and ought to be the industry practice. Though an important step toward curbing cycles of debt, the proposed rule maintains loopholes that allow lenders to avoid having to make the ability to repay assessment, and thus the final rule should apply this basic principle to all types of loans.
Today, too many short-term lenders issue loans to vulnerable customers at unreasonably high interest rates, often higher than 300%, and with numerous hidden fees. When customers are unable to repay their first loan, they are offered a second and then a third, and plunge further and further into debts. These unethical lending practices disproportionately especially affect impoverished individuals, rural borrowers, people on fixed incomes, women, minorities, seniors, and military personnel. The CFPB’s proposed rule is a necessary step toward making it harder to take advantage of those who are vulnerable.
On the issue of fair lending, the Jewish tradition is clear. The Torah proclaims that all business transactions should be done in good faith and with clear intentions: "If you sell something to your neighbor or buy something from your neighbor’s hand, you shall not wrong one another (Leviticus 25:24).” Lending should serve as a vehicle to self-reliance and not lead to an endless cycle of debt. We urge the CFPB to swiftly release a final rule that expands the “ability to pay” principle to every loan."
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The Religious Action Center of Reform Judaism is the Washington office of the Union for Reform Judaism, whose nearly 900 congregations across North America encompass 1.5 million Reform Jews, and the Central Conference of American Rabbis, whose membership includes more than 2,000 Reform rabbis. Visit www.rac.org for more.
