Consumers First Act

Floor Speech

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Ms. TLAIB. Madam Chair, I am proud to be a supporter of H.R. 1500, the Consumers First Act. The act ensures that the Consumer Financial Protection Bureau serves its statutory purpose of protecting consumers from unfair, abusive practices, and holding greedy corporations accountable when they take advantage of people in our communities.

The residents of the 13th District in Michigan are charged a whopping 369 percent APR rate by payday lenders.

According to the Center for Responsible Lending, payday loans drain over $4.1 billion in fees a year from people in 35 States that allow triple digit interest rates for payday loans. Car title loans drain over $3.8 billion in fees annually from people in 22 States.

Madam Chair, together, these loans drain nearly $8 billion in fees every year, money that should be going to pay rent or buy groceries. Instead, it is going to line the pockets of predatory lenders who are making record profits.

Across Michigan, 600 payday lending storefronts each issue 3,000 loans a year. Most of those loans are used by a borrower to repay their prior loans; and 90 percent of these loan borrowers in Michigan re- borrow within 60 days.

This is why I am offering an amendment that ensures that our residents are protected from predatory lending in the payday and auto loan industries. This amendment will provide those of us in Congress with the information necessary to know how these industries are operating and how our residents are being impacted directly.

A doctor can't treat a disease without the necessary lab work or research. This also applies to our ability, as public servants, to push back against these loans being offered in all corners of our communities that push our residents more into poverty.

This payday lending amendment would require the CFPB to report to Congress quarterly the number of investigations opened and closed relating to payday and car title lenders.

It requires an oversight report every quarter on the number of enforcement actions, an estimate of how much in fees payday or car title customers pay, how many times in the previous 12 months payday customers rolled over their loans, and how many car title loan borrowers lost their cars in the previous 12 months.

Madam Chair, we have a responsibility to tackle this debt trap crisis that is set up for more profits for corporations but leaves the American people in financial despair with no escape.

In Michigan, predatory lenders are looking to squeeze money out of low-income people with deceptive and abusive practices and have, unfortunately, found a steady stream of business back home in our districts.

Taking advantage of people in difficult situations is immoral, but companies continue to stretch and break the law for an extra buck, regardless of the human cost.

In my district, Detroiters with payday loans are more likely to file for bankruptcy, be evicted, or face utility shutoffs than any other Detroiter without payday loans.

Madam Chair, I say to my colleagues, these numbers are not unique to the State of Michigan. Our constituents are being harmed by these abusive, greedy practices, and we have to make sure we have all the information we need to take action and protect our families.

We know that many consumers who are forced to get high-interest, high-fees payday loans are targeted low-income families. Many are taken advantage of because they have relatively few other places to turn.

According to the New York Fed, more Americans than ever were at least 3 months behind on their auto loans, and it said delinquencies were worsening among subprime borrowers. Auto debt is now nearing $1.3 trillion.

Madam Chair, many of our constituents are a missed payday or a family emergency away from being forced to rely on payday loans or missing an auto payment. Many are already in that position. It is our job to make sure we have the information necessary in this body to protect them.

Madam Chair, this amendment strengthens consumer protection, and I encourage my colleagues to support it.

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Ms. TLAIB. Madam Chair, I do want to clarify to my good colleague that this is not an annual report.

We want to know, every quarter, changes in payday complaints. So just be aware that this is about a quarterly report regarding those changes. This is not an annual report.

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Ms. TLAIB. Madam Chair, I do want to note the burden outweighs the cost on our residents back home.

We need to be able to know exactly what is happening on the ground at home in regard to these kinds of practices and abusive behavior by payday lenders.

We as a body need transparency and understanding of what is going through the CFPB, and we are not able to remedy these challenges for our residents without that information.

Madam Chair, I hope that we can agree this is a bipartisan issue. This would impact a majority of our States across this Nation.

Madam Chair, again, I hope I can get some support from my good colleague, and I yield back the balance of my time.

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