Washington (November 16, 2022) – Today, Senator Edward J. Markey (D-Mass.) joined Senator Jeff Merkley (D-Ore.) and Representatives Suzanne Bonamici (D-OR-01) and Pramila Jayapal (D-WA-07) in introducing the Stopping Abuse and Fraud in Electronic (SAFE) Lending Act. The SAFE Lending Act will protect consumers from deceptive and predatory practices that strip wealth from working families by cracking down on some of the worst abuses stemming from the payday lending industry, particularly in online payday lending.
Under the direction of the Trump Administration, the Consumer Financial Protection Bureau (CFPB) reversed course on national rules protecting consumers from payday loan predators. Without strong CFPB protections at a national level, state laws protecting consumers will be all the more important.
Many states have enacted tough laws to stop abusive lending, but payday predators have continued using online lending to prey on consumers by hiding behind layers of anonymously registered websites and “lead generators” to evade enforcement. Payday lenders with access to consumers’ bank accounts are also issuing the money from loans on prepaid cards, connected to those accounts, which include steep overdraft fees. When these cards are overdrawn, the payday lender then can reach into the consumer’s bank account and charge the overdraft fee, piling on further debts. Even when the lending violates the law, abusive payday lenders can empty consumers’ bank accounts before individuals have a chance to assert their rights.
The SAFE Lending Act of 2022 would put into law three major principles to make the consumer lending marketplace safer and more secure:
1. Ensure That Consumers Have Control of their Own Bank Accounts
2. Allow Consumers to Regain Control of their Money and Increase Transparency
3. Ban Lead Generators and Anonymous Payday Lending
Joining Markey and Merkley in the Senate, the SAFE Lending Act is co-sponsored by Senators Tina Smith (D-MN), Cory Booker (D-NJ), Bernie Sanders (I-VT), Dick Durbin (D-IL), Tammy Duckworth (D-IL), Chris Van Hollen (D-MD), Dianne Feinstein (D-CA), Ron Wyden (D-OR), Richard Blumenthal (D-CT), Kirsten Gillibrand (D-NY), and Martin Heinrich (D-NM).
Joining Bonamici and Jayapal in the House, the SAFE Lending Act is co-sponsored by Representatives Earl Blumenauer (D-OR-03), Jesús G. “Chuy” García (D-IL-04), Sylvia Garcia (D-TX-29), Sheila Jackson Lee (D-TX-18), Eleanor Holmes Norton (D-DC-At Large), and Katie Porter (D-CA-45).
The SAFE Lending Act of 2022 is endorsed by Americans for Financial Reform, Center for Responsible Lending, Consumer Action, Consumer Federation of America, National Association of Consumer Advocates, National Consumer League, National Consumer Law Center, Public Citizen, and UnidosUS.
Final bill text can be found here.