Financial Services and General Government Appropriations Act, 2017

Financial Services and General Government Appropriations Act, 2017

Financial Services and General Government Appropriations Act, 2017

Congressman Ruben Hinojosa
Congressional Record: 114th Congress
Extensions of Remarks
13 July 2016

HON. RUBEN HINOJOSA of Texas in the House of Representatives
Thursday, July 7, 2016

The House in Committee of the Whole House on the state of the Union had under consideration the bill (H.R. 5485) making appropriations for financial services and general government for the fiscal year ending September 30, 2017, and for other purposes:

Mr. HINOJOSA. Mr. Speaker, I rise in support of this amendment and I thank my colleague, Representative Sewell, for standing up for consumers.

Time and time again, we hear about hard-working families being exploited by predatory, small-dollar, short-term lenders, such as payday lenders. While these loans are meant to help underserved individuals in need of quick cash, far too many times the borrower ends up trapped in a vicious cycle of rollovers, fees and more debt.

We sell our families short when we accept that high-interest loans are the best we can do for our communities. Payday and auto title loans, with uncapped annual percentage rates, have long enticed families in moments of desperation--offering short-term fast cash at the cost of long-term debt--at rates averaging 500 percent APR.

In my home state of Texas, an average $500 payday loan costs an astounding $1,100 or more to repay in a period of just a few months. Moreover, in Texas, payday and auto title lending is a $5.8 billion industry with over 70 percent of the volume from refinances and fees. In fact, four of every five payday loans are rolled over or renewed within 14 days with the majority of those costing the consumer more in fees than they borrowed, according to a CFPB study.

Thankfully, the CFPB has taken the lead in proposing to rein in these predatory and harmful loans. We should be fighting to eliminate excessively high-interest rates and debt-trap cycles that define much of today's payday and auto title loan lending landscape, rather than fighting against the CFPB's efforts.

Unfortunately, this financial services and general government appropriations bill enshrines the status-quo of debt-traps and mountains of fees for consumers without any protections afforded by the CFPB's proposed rule.

I applaud the CFPB's rulemaking efforts in this area, and I hope it ushers in a new era of responsible lending.