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Payday Loans Are Toxic Like the Water of Flint Michigan

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Washington, DC, February 11, 2016 | comments

In opening remarks during a Financial Institutions and Consumer Credit Subcommittee hearing, Congresswoman Maxine Waters (D-CA), Ranking Member of the Financial Services Committee, associated the hazards of previously unregulated financial products, such as payday lending, to the water crisis in Flint, Michigan.

As the Consumer Financial Protection Bureau is preparing regulations for payday lenders, Waters underscored the important role that financial products play in the life of everyday consumers and stated that access to those products, “like access to water, should be safe.”

Full text of the remarks, as prepared for delivery, is below.

Whether it is with regard to mortgages or credit cards or small dollar loans, my Republican colleagues and I agree on one thing, and that is that access to credit is important.

However, there is also an important distinction in what we believe.

The residents of Flint Michigan have plentiful access to water. Surely all of my colleagues agree that access to water, any water, is not enough.

It is not enough if that water is contaminated with lead, or if that water is a vector for Legionnaire’s disease.

I am very concerned about what kind of water our citizens have access to. I believe in access to clean, drinkable water. We all do.

However, I also believe the same about mortgages, and credit cards, and payday loans.

Consumer credit products shouldn’t be available if they hurt their customers. We depend on our state regulators and the CFPB to make sure that our constituents don’t have access to just any kind of credit, but to safe and fair credit products that won’t put them and their families at risk.

Too many credit products are contaminated with predatory fees, reckless underwriting, and toxic fine print. I think my Republican colleagues should agree that access to loans, like access to water, should be safe.

I believe our job, and the job of the CFPB, is to ensure access to safe, affordable credit to everyone. I look forward to discussing how we can support the CFPB in their mission.


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