Raúl Torrez | Attorney General

AG Balderas Calls Opposes CFPB Effort to Delay Protections from Payday Lenders

FOR IMMEDIATE RELEASE: March 19th, 2019

Contact: David Carl (505) 288-2465

Albuquerque, NM – Today, Attorney General Hector Balderas urged the Consumer Financial
Protection Bureau to take immediate action to protect consumers from abuses in payday lending,
vehicle title lending, and other types of high-cost exploitative consumer lending, after a rule
aimed at protecting borrowers from abusive lenders was delayed a second time.
“President Trump’s Consumer Finance Protection Bureau is failing to deliver on its promise to
protect New Mexican consumers,” said Attorney General Hector Balderas. “Yet another delay on
this necessary piece of protection will be devastating for New Mexican families, and allow
predatory payday lenders to take advantage of at-risk New Mexicans.”
In 2017, CFPB announced a new rule that would help protect borrowers and ensure they’d have
the ability to repay loans while also prohibiting lenders from using abusive tactics when seeking
repayment. The rule went into effect in early 2018, but compliance was delayed to Aug. 19,
2019, to give lenders time to develop systems and policies. CFPB has now proposed to further
delay compliance to Nov. 19, 2020, more than three years after the regulation was finalized. At
the same time, CFPB is reviewing another rule that would altogether rescind this one.
Together, these actions would put at risk hard-fought borrower protections. In their comments,
AG Balderas and 24 additional attorneys general cite CFPB’s own findings that demonstrate the
many ways the short-term payday and title lending model is broken – specifically as a significant
percentage of these loans are expected to fail. In fact, 90 percent of all loan fees comes from
consumers who borrow seven or more times in 12 months. Twenty percent of payday loan
transaction series end in default and 33 percent of single-payment auto title loan sequences end
in default.

Raul Torrez

View Categories

Categories
The image is the New Mexico Department of Justice primary seal. This seal is framed with gold gradient rope and a slim gold bar followed by a thicker dark blue circular bar that has white text that reads, "State of New Mexico" at the bottom and "Department of Justice" at the top. At the center of the seal is a gradient circle with a dark blue roman-inspired Pillar in the shape of New Mexico.