If you need money quickly you may feel tempted to take a payday or an auto title loan. That’s when a lender will offer you cash for a short period of time for an interest rate that could reach 400 percent, or higher. Sixteen states and the District of Columbia outlaw these payday loans.

But the Trump administration team at the Consumer Financial Protection Bureau (CFPB) seems to think it’s unnecessary to protect consumers from predatory lending, even though that is supposedly the bureau’s job. In response to the CFPB plan to withdraw protections for borrowers, consumer advocates are calling for support of a payday lending rule that would protect borrowers from the worst abuses.

The payday lending rule was proposed after a five-year study, by the same CFPB, under the Obama administration. Basically, it would prevent lenders from making loans to people who don’t have the money to repay them.  Almost half of all payday loan borrowers take out more than 10 payday loans a year and get caught in a debt trap that never seems to end.

The Obama-era CFPB found, among other things, that a typical loan that goes unpaid for two weeks carries an annual percentage rate (APR) of 391 percent.

So at the urging of consumer advocates and consumers, the CFPB created the payday lending rule to protect people from these predatory interest rates. It is scheduled to go into effect in August of 2019.  But the new director of the CFPB, Kathy Kraninger, proposed repealing the payday lending rule that also would cover vehicle title loans. The title loans operate like payday loans and often people take out loan after loan to repay the earlier loans. 

Before the CFPB can rescind the rule, it needs input from the public. In Washington-speak it is seeking comments. This a good chance to speak up and let the Consumer Financial Protection Bureau and your congressperson know what you think.  

Lauren Sanders, Associate Director of the National Consumer Law Center, said, “The sudden reversal by the CFPB, which is charged with protecting consumers, flies in the face of extensive evidence of the harm of payday loans. The agency’s proposal is arbitrary and capricious and will certainly face a legal challenge if it is finalized,”

You can contact the CFPB here.

You can contact your U.S. Congressperson here.

You can contact your U.S. Senator here.