Today, the Consumer Financial Protection Bureau (CFPB) announced that it would rescind the “ability to repay” requirement in its October 2017 Payday Lending Rule. The original rule required payday and auto title lenders to determine that borrowers were able to repay these risky high-interest loans before the lenders could issue them. This ability to repay requirement was an essential feature of the Payday Lending Rule, and served finally to break the vicious cycle of debt in which lenders trap payday and auto title loan borrowers, who are disproportionately Black and Latinx. The CFPB itself has determined that Black borrowers are more likely to have multiple payday loans than average white payday borrowers.

“Rescinding this essential protection is yet more evidence that the current CFPB leadership has abandoned the agency’s core mission of protecting American consumers, and yet another example of its particular unwillingness to protect Black consumers,” said Sherrilyn Ifill, President and Director-Counsel of the NAACP Legal Defense Fund. “Since November 2017, the agency has drastically reduced its enforcement activity, dissolved its fair lending office, reversed its position on critical issues protecting homeowners, and shielded a political appointee who refused to apologize for a history of racist comments. These actions are simply unacceptable for an agency created to protect the most vulnerable consumers.”

The CFPB’s attempt to repeal critical elements of the Payday Lending Rule will result in more financial harm to borrowers of color—more wealth being drained from Black communities—all to enrich lenders who prey on those most in need. The CFPB should implement the 2017 Payday Rule as written and must re-orient itself to its mission of protecting consumers.

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Founded in 1940, the NAACP Legal Defense and Educational Fund, Inc. (LDF) is the nation’s first civil and human rights law organization and has been completely separate from the National Association for the Advancement of Colored People (NAACP) since 1957—although LDF was originally founded by the NAACP and shares its commitment to equal rights. LDF’s Thurgood Marshall Institute is a multi-disciplinary and collaborative hub within LDF that launches targeted campaigns and undertakes innovative research to shape the civil rights narrative. In media attributions, please refer to us as the NAACP Legal Defense Fund or LDF.