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Don’t gut our payday lending protections, AG Cooper tells Congress

Release date: 10/5/2012

Joins 40 other AGs to fight bill that would harm consumer protections

Raleigh:  Legislation currently being considered by Congress would undermine states’ authority to crack down on predatory lending practices such as payday loans, car title lenders, and prepaid credit cards, Attorney General Roy Cooper said Friday.
“Payday loans trap borrowers in an endless cycle of debt, and that’s why we fought so hard to end payday lending in North Carolina,” Cooper said. “We have a long history of standing up for consumers and successfully fighting predatory loans in our state, and Congress needs to respect our decision to ban high-interest loans.” 
In a joint letter, Cooper and 40 other state attorneys general warned House Speaker John Boehner, House Minority Leader Nancy Pelosi, Senate Majority Leader Harry Reid and Senate Minority Leader Mitch McConnell about the negative effects of the Consumer Credit Access, Innovation and Modernization Act, H.R. 6139.
“This proposal would preempt state laws governing consumer lending and undermine longstanding states’ rights in the area of consumer protection,” the attorneys general stated in their letter.
By preempting tougher laws like the ones in North Carolina, the proposed legislation would block state efforts to protect consumers from harm.  Many states have established their own framework to protect consumers from the risks associated with high cost, short-term lending products.  The legislation proposed by Congress would allow payday lenders, installment lenders, car title lenders, prepaid card issuers and check cashers to avoid more stringent state laws by obtaining a federal charter.
The bill has been assigned to a congressional committee which will consider the legislation and determine whether to send it to the full House or Senate.
“States are on the front lines of consumer protection. We hear daily from consumers about the problems they face and can react more quickly than Washington to put new protections in place when needed,” Cooper said. “It makes no sense for Congress to undermine our ability to protect people here in North Carolina.”
Also signing on the letter were attorneys general from Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, the District of Columbia, Georgia, Guam, Hawaii, Idaho, Illinois, Indiana, Iowa, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Montana, New Hampshire, New Jersey, New Mexico, New York, North Dakota, Ohio, Oregon, Pennsylvania, Puerto Rico, Rhode Island, South Dakota, Tennessee, Vermont, Washington, West Virginia, Wisconsin and Wyoming.

Media contact: Noelle Talley (919) 716-6413