Representatives García and Grothman Urge Congress to Pass the Veterans and Consumers Fair Credit Act to Bolster Economic Recovery
Chicago, IL - As COVID-19 brings financial devastation to our communities, Reps. Jesús “Chuy” García and Glenn Grothman urge Congress to pass their Veterans and Consumers Fair Credit Act (H.R. 5050), a bill to protect families recovering from the pandemic by extending the protections of the Military Lending Act to all consumers. These protections include a 36% interest rate cap for payday and car-title loans.
Recent revelations suggest that officials at the Consumer Finance Protection Bureau (CFPB) may have manipulated data and lied to Congress to help predatory lenders.
“Predatory loans trap working class people like the ones I represent in Chicago in an endless cycle of debt. I am outraged by reports that the Consumer Finance Protection Bureau may have manipulated data to favor banks and lenders and misled Congress. Regulators are supposed to protect us, not sell us out,” said Congressman Jesús “Chuy” García. “The CFPB should scrap its payday lending rule immediately, and Congress should pass the bipartisan Veterans and Consumers Fair Credit Act (H.R. 5050) to protect working class families from falling into a cycle of debt.”
“The average interest rate on a payday loan in America is 391 percent. While I am not normally a proponent of larger government, it has long been the role of regulatory agencies to prevent people from being taken advantage of in financial documents—be it in regard to insurance, annuities, real estate or mortgage loans,” said Congressman Glenn Grothman. “Historically, the United States has had usury laws, putting a guard rail up for borrowers. As more and more loans are given online, it becomes more difficult for states to deal with the problem of snowballing debt. We already protect military service members under the Military Lending Act, which means that we have recognized the predatory nature of high-interest loans to our men and women in uniform. This raises the question – if it is wrong to allow predatory lenders to target our service members, why is it right to let them target the rest of the community?”