Today Congresswoman Suzanne Bonamici (OR-1) introduced the Stopping Abuse and Fraud in Electronic (SAFE) Lending Act. The legislation, a companion bill to legislation introduced by Senator Jeff Merkley, will curb predatory online lending practices by closing loopholes in current policy and enhancing enforcement of state usury laws.
"Even in states with some of the strongest payday lending protections in the nation, too many consumers still fall victim to abusive offshore and online lending services," Bonamici said. "Misled by deceptive advertising, families try to pay their bills but end up with exorbitant interest rates, making their economic situation even worse."
To stop these abuses, the SAFE Lending Act provides these solutions to four key problems:
SAFE ensures that consumers have control over their own bank accounts by preventing third-party control through remotely created checks (RCCs), and it allows consumers to cancel a debit as easily as cancelling a check.
The SAFE Lending Act closes loopholes in state usury law enforcement by requiring all lenders to abide by the same rules for small-dollar lending in that state.
SAFE bans "lead generators" and anonymous payday lending.
It stops offshore and other rogue lending in violation of state law, and gives the Consumer Financial Protection Bureau authority over those in violation.
"This bill will help Oregon and other states better protect their residents from abusive lending practices," Bonamici added. "And by stopping these practices, we protect the economic stability of families."
The SAFE Lending ACt was originally introduced in the Senate by fellow Oregonian, Senator Jeff Merkley, in July. Congresswoman Bonamici's version in the House of Representatives is cosponsored by Representatives Raùl Grijalva (AZ-7), Keith Ellison (MN-5), Hansen Clarke (MI-13), Bob Filner (CA-51), Rosa DeLauro (CT-3), Earl Blumenauer (OR-3), John Sarbanes (MD-3), and Judy Chu (CA-32). It has been endorsed by the Center for Responsible Lending, Consumer Federation of America, Consumer Action, Consumers Union, the National Consumer Law Center on behalf of its low-income clients, and USPIRG.