Several states are putting curbs on
loans backed by car titles—short-term, high-interest debt that critics
say too often results in consumers losing their vehicle when they can't
keep up with the payments.
The payday lending trap has been shorting working families to the tune
of nearly $5 billion
per year ever since the industry exploded onto the scene in the
1990’s. The number of payday lending institutions has jumped
exponentially from 500 in 1990 to about 22,000 today (compared
with 14,000 McDonald's), mainly targeting low-income African
American and Latino communities.
As Congress debates federal financial reform legislation, a key priority
for financial industry lobbyists remains gutting provisions that would
strengthen enforcement by state attorneys general and stopping the
partial restoration of state powers to regulate national bank abuses
against consumers. As we
detailed three years ago, much of the damage to communities from
subprime lending might have been avoided if the Bush Administration had
not been able to shut down most state anti-predatory lending laws early
in the decade.
There will be 2.4 million foreclosures in
2009 along with 9 million foreclosures between 2009-2012, according to the Center
for Responsible Lending (CRL). CRL also estimates that 69 million homes will lose property value because of nearby
foreclosures for a total property value loss of $502 billion. As part of our Multi-State Shared Agenda,
the Progressive States Network is working with its partners and leading experts
to promote reforms to stem the foreclosure crisis and put in place reforms to
discourage predatory lending practices in the future.