Congresswoman Suzanne Bonamici (D-OR) and Congressman Elijah Cummings (D-MD) are urging major banks to allow consumers to block automatic withdrawals taken from their accounts by Internet-based payday lenders.
In a letter to the CEOs of the five largest U.S. retail banks, Bonamici and Cummings asked the executives to voluntarily adopt provisions of the Stopping Abuse and Fraud in Electronic (SAFE) Lending Act, H.R. 990, which they introduced in Congress earlier this year. The request follows a decision by JPMorgan Chase to reform the way it treats withdrawals from Internet-based payday lenders.
“Too often families turn to payday lenders hoping to make ends meet, only to be hit with exorbitant interest rates that make these loans nearly impossible to repay,” the Members wrote in the letter. “Banks should take every available step to prevent payday lenders from harming their own customers.”
In March, Bonamici and Cummings introduced the SAFE Lending Act of 2013, H.R. 990, to help protect consumers from predatory payday lending practices. The legislation will allow consumers to stop automatic bank withdrawals from payday lenders, require that lenders abide by the laws of the state in which they are lending, ban third party “lead generators” that collect applications and auction them to payday lenders, and provide enhanced enforcement authority to federal regulators.
Letters were mailed to the CEOs of JP Morgan Chase & Co., Bank of America Corp., Citigroup Inc., Wells Fargo & Co., and U.S. Bancorp.