Rep. Poliquin Has Chance to Support Pay Day Lending Rules

Click here to sign our petition calling for a stop to predatory lending practices.

As part of a nation-wide day of action, the Maine People's Alliance today called on newly-elected Congressman Bruce Poliquin to take a stand for the millions of Americans trapped in a cycle of debt by short term, high-interest "payday"loans by supporting new rules reigning in predatory lending practices.

As a member of the House Financial Services Committee, Poliquin has oversight of the Consumer Financial Protection Bureau (CFBP), which is currently considering new rules that could limit payday lenders' ability to prey on vulnerable consumers. Advocates are urging the congressman to sign on to a letter addressed to CFPB director Richard Cordray indicating support for the proposed regulations.

"Every year, millions of Americans turn to pay day lenders in the hopes of finding short-term financial relief only to find themselves mired in a cycle of debt because of predatory lending practices," said Amelia Mitter-Burke, a community organizer with the Maine People's Alliance. "Congressman Poliquin is in a unique position as a member of the Financial Services Committee and he has a clear choice: he can either continue to let payday lenders take advantage of people living paycheck to paycheck, or he can support rules to stop these greedy, unscrupulous practices."

Payday lenders prey upon low-income workers by offering short-term, high-interest loans marketed as a quick financial fix that in reality create a long-term debt trap. Payday lenders often charge an annual percentage rate (APR) of 300% or higher for a typical payday loan and make these loans with no regard to an individual's ability to repay them, instead relying on direct access to an individuals' bank account for repayment.

Each year, payday lenders rake in more than $10 billion in fees by trapping an estimated 12 million consumers in a cycle of debt. Thirty-five states allow payday lending with an average of 300% APR or more on a two week loan. Maine is one of 24 states that have imposed regulation on payday lenders, capping the rate at 30%. Despite Maine's leadership on this issue, payday lenders have sought to add provisions to the rulemaking process that would preempt and undermine existing state regulation.

"Rep. Poliquin has previously worked on Wall Street and, with this committee assignment, will no doubt be receiving a great deal of lobbying pressure from financial firms, including payday lenders. This is an opportunity to show he's willing to put the interests of folks on Main Street ahead of the worst excesses of Wall Street and do what's right for Maine and the nation," said Mitter-Burke.

A link to the full letter can be found here:

Click here to sign our petition calling for a stop to predatory lending practices.