Reconstructing Judaism and the Reconstructionist Rabbinical Assocation were among seventeen Jewish organizations writing to the Consumer Protection Finance Bureau in opposition to an administration proposal to rescind protections against predatory lending. We also joined another letter on the issue signed by national religious organizations, coordinated by the Faith and Credit Roundtable.
The Jewish communal letter reads:
Dear Director Kraninger:
We, the undersigned Jewish organizations, submit this comment in strong opposition to the Consumer Financial Protection Bureau’s proposal to rescind the ability-to-repay standards. Jewish tradition compels us to oppose this proposal that, if implemented, would allow lenders to exploit their customers. Loans that a borrower cannot realistically repay do not help consumers and, instead, they are simple stumbling blocks that prevent the poor from achieving financial stability.For many Americans, access to credit and loans are necessary tools needed to help secure a home, buy a car, or escape poverty. However, many people, particularly the poor, students, people in fixed incomes, women, minorities, seniors, and military service personnel, are unable to obtain loans at competitive rates on the prime market. These individuals are often exploited by predatory lending practices, resulting in a loss of more than $8 billion per year.1 This proposal is a significant step backwards in addressing this challenge.
We strongly oppose this proposal and urge the CFPB to implement basic ability-to-repay standards. Our sacred Jewish texts inspire us to protect those who are most vulnerable. The Book of Exodus (22:24) states: “If you lend money to My people, to the poor among you, do not act toward them as a creditor; exact no interest from them.” These words remind us to guard against lending at high interest rates that too often benefit the lender at the borrower’s great expense. Jewish tradition also teaches the imperative of “not putting a stumbling block before the blind” (Leviticus 19:14). Predatory lending takes advantage of vulnerable people, hurting their credit and wellbeing, rather than providing a compassionate lifeline for those in need. Fair loans should be a means of lifting up an individual, rather than diminishing them by crippling them with debt.
Common sense rules requiring that borrowers are able to repay their loans will hold lenders to a basic standard and ensure that families receive only those loans that are safe for them to incur. We know that the CFPB has not disputed that the cycle of debt is unfair and abusive and that the CFPB has not provided any evidence to support its proposal.2 We have attached a 2016 comment from the Jewish community supporting ability-to-repay standards and a recent report from the Center for Responsible Lending to support our comments and provide additional evidence and context about the predatory nature of payday loans and the importance of an ability-to-repay standard.
For all of these reasons, we urge you to withdraw the proposal and implement the October 2017 rule as written and without delay.
- Bend the Arc Jewish Action
- Brith Sholom Jewish Center
- Carolina Jews for Justice
- Central Conference of American Rabbis
- Hebrew Free Loan Society
- Jewish Community Action
- Jewish Council for Public Affairs
- Jewish Women International
- National Council of Jewish Women
- Rabbinical Assembly
- Reconstructing Judaism
- Reconstructionist Rabbinical Association
- T’ruah: The Rabbinic Call for Human Rights
- Union for Reform Judaism
- Uri L’Tzedek: Orthodox Social Justice
- The Workmen’s Circle
- 1. Standaert, Diane; Davis, Delvin; and Rios, Charla. 2019. Payday and Car Title Lenders Drain Nearly $8 Billion in Fees Every Year. Durham, NC: Center for Responsible Lending. Retrieved fromhttps://www.responsiblelending.org/research-publication/payday-and-car-title-lenders-drain-8-billion-fees-every-year.
- 2. Center for Responsible Lending. 2019. Proposed Repeal of Payday Loan Rule: Overview and Initial Reaction. Durham, NC: Center for Responsible Lending. Retrieved from https://www.responsiblelending.org/research-publication/proposed-repeal-payday-loan-rule-overview-initial-reaction.