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Coalition for Safe Loan Alternatives Expands as Additional Members Push for Safer Lending Nationwide
Washington, D.C. – May 31, 2016 – The Coalition for Safe Loan Alternatives (CSLA) today announced it has expanded its ranks with new members from Alabama, Florida, New Mexico, and beyond who are dedicated to providing safe, short-term loans to Americans in need of emergency assistance.
The coalition is made up of more than 20 community organizations, advocacy groups, local banks, and credit unions that support the Consumer Financial Protection Bureau’s (CFPB) work to rein in the predatory payday loan industry. The CFPB is expected to announce new regulations this week that will prohibit payday and auto title lenders from charging 1,000 percent interest and other unfair practices harmful to working people.
The Coalition for Safe Loan Alternatives was created in March to advocate for safer, short term loans to help Americans needing emergency financial assistance, and to combat the predatory payday lenders.
“It’s a myth that short term, small dollar loans have to be debt traps,” said David Rothstein, chairman of the Coalition for Safe Loan Alternatives. “Our members are making loans with no balloon payments, real evaluation for people to repay, and positive reporting to help rebuild credit.”
The need to combat abusive payday lenders grows by the day, with more and more Americans affected by predatory practices. For example, ABC News reported earlier this month that a retired and disabled Marine from Kansas City paid $50,000 in interest on a $2,500 loan over five years. Last year, a Virginia resident borrowed $800 to get through the holidays and in a few months owed her lender $1,800. According to The Pew Charitable Trusts, roughly 12 million people in the U.S. borrow a total of $50 billion, spending some $7 billion on just interest and fees.
Two weeks ago, the CFPB released a report revealing that one in five borrowers who take out a single-payment auto title loan have their vehicle’s seized for failing to repay their debt. These borrowers who need short-term emergency loans end up facing interest rates of more than 300 percent. The coalition supports the efforts of the CFPB to bring these abuses to light and put forward new rules of the road to protect consumers.
“This is a problem that affects all working Americans, not just poor people,” said Doug Farry, co-founder of Employee Loan Solutions in San Diego, which provides safe loans to working people through their employers. “When the hot water heater stops working or the car breaks down, very few people are financially prepared to spend thousands of dollars on repairs. That’s why we need to make sure that payday and auto title lenders can’t keep taking advantage of people who are in a pinch.”
More about the Coalition for Safe Loan Alternatives:
The Coalition is a centralized hub for best practices around community-based lending so that people have options when it comes to borrowing money and don’t have to get trapped in dept. The Coalition encourages conversations among organizations and individuals, and provides a variety of resources to take action and get involved.
The focus of the Coalition is to identify and share information about better lending options with low interest rates that are not lump sum, two-week loans. The Coalition will continue to work to grow this team of organizations and individuals nationwide who are committed to helping people in need find affordable, responsible and safe financial assistance.
The Coalition will also invite lending experts, government officials and others to provide specific feedback and new ideas to encourage innovation and solutions. If you are interested in getting involved, please visithttp://safeloancoalition.com/.
David Rothstein, Principal at Cities for Financial Empowerment Fund in Cleveland, Ohio, is the chair for the CSLA.
New Members of the coalition include:
- Alabama Appleseed Center for Law & Justice, Inc
- Arkansans Against Abusive Payday Lending
- CDFI Coalition
- Credit Builders Alliance
- Florida Alliance for Consumer Protection
- Indiana Assets and Opportunity Network
- Interfaith Worker Justice
- Kentucky Equal Justice Center
- Neighborhood Housing Services of Greater Cleveland
- Ohio CASH
- Coalition One
- New Mexico Partnership for Community Action
- Representative Deborah Armstrong,
- New Mexico Southwest Center for Economic Integrity
- Woodstock Institute
Original members of the coalition include:
- Family Policy Institute of Oklahoma
- Bonnie Warren, ComfortKeepers, Ohio
- Employee Loan Solutions, San Diego
- Ona Porter; Prosperity Works New Mexico
- Stephen Fischmann; New Mexico Fair Lending Coalition
- Patti Ferguson-Palmer; President, Tulsa Classroom Teachers Association
- Sunrise Bank, St. Paul, MN
- Jack Hiatt; attorney, Santa Fe, NM
About the Coalition for Safe Loan Alternatives
The Coalition for Safe Loan Alternatives (CSLA) is a national forum for organizations and individuals committed to finding and promoting safe small dollar lending alternatives. Members of CSLA are organizations for financial literacy, community banks, local credit unions and local community-driven organizations. CSLA will provide educational resources, opportunities for discussion and financial educational resources on a national and local level through webinars, seminars and discussions. For more information visit http://safeloancoalition.com/.