AG HERRING JOINS BI-PARTISAN EFFORT TO FIGHT LEGISLATION THAT WOULD TERMINATE STATES' ABILITY TO PREVENT PREDATORY LENDING

RICHMOND (June 28, 2018) – Today, Attorney General Mark Herring joined a bi-partisan effort urging U.S. Congressional leadership to vote against HR 3299 ("Protecting Consumers' Access to Credit Act of 2017”) and HR 4439 ("Modernizing Credit Opportunities Act”). The bipartisan coalition of 20 attorneys general sent a letter to leadership in the U.S. Senate expressing their opposition to the proposed legislation, which could potentially invalidate the state's ability to limit interest rates on payday and other high interest loans, and undermine the state's ability to enforce consumer protection laws.

"One of my top priorities as Attorney General has been to protect Virginians from predatory lenders that prey on individuals who are looking for a way out of a difficult financial position,” said Attorney General Herring. "We need stronger laws to protect Virginians and Americans from predatory loans, but these bills would weaken the consumer protection laws we already have in place. I join my fellow state attorneys general in urging Congress against the further restriction of a state's ability to protect their citizens from abusive lenders.”

As the attorneys general expressed in the letter, HR 3299 and HR 4439 would constitute a substantial expansion of the preemption of state usury laws, which have long been recognized as the purview of the individual states. Over decades, states have crafted laws that create a careful balance between the need for access to credit and the need to ensure that loans are offered on terms that do not create consumer harm.

Attorney General Herring created the OAG's first Predatory Lending Unit to investigate and prosecute suspected violations of state and federal consumer lending statutes, including laws concerning payday loans, car title loans, consumer finance loans, mortgage loans, mortgage servicing, and foreclosure rescue services. The Unit also focuses on consumer education so Virginians are aware of the potential risks of these loans, as well as alternatives.

In recent years, Attorney General Herring and his team have focused on online lenders, which have been a growing percentage of the lending market, but can still present the same risks as any payday or motor vehicle title lender. To date, the Predatory Lending Unit has recovered more than $25 million in restitution and forgiven debt from online lenders, including $15.3 million from CashCall, $4 million from MoneyKey, $3.4 million from Opportunity Financial, and $2.7 million from MoneyLion.

During his administration, Attorney General Herring's  Predatory Lending Unit has also successfully brought enforcement actions against, among others, motor vehicle title loan lenders, online payday lenders, mortgage servicing companies, and pawnbrokers.

The coalition of Attorneys General signing the letter hail from: California, Colorado District of Columbia, Hawaii, Illinois, Iowa, Maryland, Massachusetts, Minnesota, Mississippi, New Mexico, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Tennessee, Vermont, Virginia and Washington.

You can find a copy of the letter here.

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