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CoPIRG applauds Attorney General Suthers for joining his colleagues from 40 other states, both Republicans and Democrats, in opposing H.R. 6139, which would pre-empt state laws governing consumer lending.
“H.R. 6139 would turn back existing consumer protections and curtail all future efforts by the states to enhance their consumer safeguards,” according to the letter signed by Suthers and his colleagues.
According to an analysis by Coloradans for Payday Lending Reform (CPLR), Attorney General Suthers has been an effective regulator and his office has been doing a good job enforcing Colorado’s payday lending laws. Over the years, his office has filed suit to stop payday lenders from illegally selling loans in Colorado over the internet. It has gone to court to stop others from skirting Colorado law by using sham corporations located on Indian reservations.
“This is a blatant move by the payday industry to find a regulator who will provide less oversight,” said CoPIRG Director Danny Katz. “They are looking for a Get-Out-of-Regulation-Free Card.”
H.R. 6139 would move oversight for non-bank lenders from the Consumer Financial Protection Bureau (CFPB) to the Office of the Comptroller of the Currency. According to CPLR, this would allow non-bank financial services firms such as payday lenders to bypass the CFPB and stronger state laws and offer their high-cost loans and services nationwide. It would totally pre-empt state licensing laws for non-bank financial services firms including recent reforms passed in Colorado. In place of state safeguards, it would establish only minimal consumer protections. The bill would exempt loans with terms of one year or less from the disclosure requirements of the Truth in Lending Act – the universal standard for measuring the true cost of credit – and substitute a cost metric that is confusing and misleading.
According to the coalition of attorney generals, it would prohibit them from enforcing state laws that were carefully designed to address problems in the local market and significantly impair their ability to respond in a targeted fashion to new abuses as they emerge.
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