Letter to Comptroller Stringer Calling for Divestment from Illegal Payday Lenders

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The Honorable Scott M. Stringer Comptroller, Nyc One Centre Street Nyc, NY 10007

Dear Comptroller Stringer:

The businesses that are undersigned that you immediately and completely divest ny City’s your your retirement funds from payday lending companies – whose loans are categorically illegal in nyc. City pension funds spent more than $20 million in payday high-cost and lending installment financing companies in 2016. Additionally, City retirement funds invested nearly $160 million in Lone celebrity Fund VIII, a individual equity investment who has DFC global, Inc.,i which, in modification, owns several pay day loan providers, including money Mart although the Check Cashing Store.

Investing retirement that is general general general public in disreputable payday funding organizations raises a main conflict for the town. Not simply do these lenders make triple-digit interest loans and that can be illegal in nyc, however the most of those happen the topic of enforcement actions for flagrant violations in connection with legislation; mistreated customers; and encountered allegations of misleading and defrauding investors – including retirement that is general general public – in states where these are typically permitted to make use of.

The large choice of investments : ● cash America Overseas, Inc. and EZCORP, Inc. have been the subjects of major enforcement actions due to the consumer Financial Protection Bureau (CFPB) for illegally court this is certainly robo-signing, breaking the Military that is federal Lending,ii and unlawfully harassing borrowers at their homes and workplaces,iii among other violations. ● Cash America Overseas, Inc. additionally made loans with interest rates that surpassed cent that is 1,000per Pennsylvania residents,iv in breach of Pennsylvania’s consumer safety laws. ● World Acceptance Corp. is actually under research due to the CFPBv since March 2014 to discover whether or otherwise not the company’s business that is exploitative are available in breach linked to the consumer Financial Protection Act, the truth in Lending Act, along with other federal customer monetary regulations. ● Enova Overseas, Inc., operator for the payday this is certainly online CashNetUSA, ended up being found to own gotten the absolute most consumer complaints among all payday lenders,vii based on the CFPB’s client issue database. ● DFC Global, Inc. have been sued by a broad basic average man or woman retirement investment in connection with grounds it complied with authorities legislation and guidance pertaining to reckless funding techniques, and [2] that the company made ‘prudent,’ ‘conservative,’ and ‘responsible’ underwriting decisions when designing loans.”viii therefore it “misrepresented to investors that [1

We think these assets pose reputational, appropriate, regulatory and monetary problems, and that you’ve gotten an ethical and responsibility that is fiduciary divest.

Nyc is amongst the 15 states, plus D.C., where state that is strong guidelines and enforcement efficiently ban payday lending. name name} brand name|brand name} brand brand new York’s usury tips are one of several strongest to the nation, capping interest rates at 25% APR. As a consequence of our ban, New Yorkers save about $790 million every year in feesix that pay day loan providers and their ilk would otherwise siphon—an estimate that doesn’t also add bank overdraft fees along with other fallout this is certainly financial pay day loans.

The payday financing industry is allowed to work, individuals struggling to obtain from paycheck to paycheck are methodically targeted for high-cost loans they can’t manage in states where in fact. Cash advance providers charge excessive expenses and interest that is shockingly high – typically between 300% and 400% APR. The financing that is payday model is based on loan-flipping, as borrowers typically must refinance or move over their loans – often multiple times – ensnaring them in a lasting period of monetary responsibility. Research reports have shown that communities of color are disproportionately targeted among these loans which can be debt-trap