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Merkley, Bonamici, Cummings Introduce SAFE Lending Act To Help Protect Families Against Abusive Payday Lending Practices

Tuesday, February 13, 2018
Rebecca Borné

WASHINGTON, D.C. – Today, U.S. Senator Jeff Merkley (D-Oregon) and U.S. Reps. Suzanne Bonamici (D-Mich.) and Elijah E. Cummings (D-Md.) introduced the Stopping Abuse and Fraud in Electronic (SAFE) Lending Act, a bill to crack down on some of the worst abusive practices of the payday lending industry, which strips wealth from working families across the country. The bill, which underscores the importance of state usury limits in controlling predatory lending, is cosponsored by various members of the House and Senate.

"Payday lenders will go to great lengths to trap struggling families in an endless cycle of debt," said Rebecca Borné, Senior Policy Counsel at the Center for Responsible Lending. "Triple-digit interest rates of 300% or more APR exacerbate people’s financial distress, including low-wealth families and communities of color, leading to a cascade of financial consequences—exorbitant fees, harassing debt collection practices, lost bank accounts, and even bankruptcy. We applaud Senator Merkley and Representatives Bonamici and Cummings for their leadership on this issue and will work with them to push this legislation forward."

The bill would explicitly require all lenders, including banks, to comply with state lending laws. Banks have typically claimed preemption over state usury limits—at times making payday loans exceeding 300% APR directly to their customers, or forming "rent-a-bank" shams with nonbank predatory lenders to help those lenders circumvent state law. This bill is especially important as high-cost lenders push to expand these rent-a-bank shams.

The bill would also prohibit "lead generators" and anonymously registered websites from disseminating consumers’ private financial information to payday lenders; prohibit overdraft fees on prepaid cards, some of which are issued by payday lenders; and aim to give payday loan borrowers more control of their bank accounts.

In the Senate, the SAFE Lending Act is cosponsored by Senators Patty Murray (D-WA), Richard Blumenthal (D-CT), Bernie Sanders (I-VT), Ron Wyden (D-OR), Edward J. Markey (D-MA), Dianne Feinstein (D-CA), Cory Booker (D-NJ), Elizabeth Warren (D-MA), Tom Udall (D-NM), Tammy Baldwin (D-WI), Tammy Duckworth (D-IL), Tina Smith (D-MN), Kirsten Gillibrand (D-NY), Kamala Harris (D-CA), Martin Heinrich (D-NM), and Dick Durbin (D-IL).

In the House, it is cosponsored by Representatives Earl Blumenauer (D-OR), Judy Chu (D-CA), Rosa DeLauro (D-CT), Keith Ellison (D-MN), Raúl Grijalva (D-AZ), Pramila Jayapal (D-WA), Eleanor Holmes Norton (D-DC), Jamie Raskin (D-MD), Jan Schakowsky (D-IL), and Louise Slaughter (D-NY).

For more information, or to arrange an interview with a CRL spokesperson on this issue, please contact Ricardo Quinto at