Jayapal, Merkley, Bonamici Re-Introduce Legislation to Protect Consumers from Predatory Payday Lending Practices

Washington, D.C. – U.S. Representative Pramila Jayapal (D-WA-07), U.S. Senator Jeff Merkley, and U.S. Representatives Suzanne Bonamici (D-OR-01) introduced the Stopping Abuse and Fraud in Electronic (SAFE) Lending Act. The SAFE Lending Act safeguards consumers from deceptive and predatory practices that strip hard-earned wages from working families by cracking down on some of the worst abuses stemming from the payday lending industry, particularly in online payday lending.

During the first Trump Administration, the Consumer Financial Protection Bureau (CFPB) reversed course on national rules protecting consumers from payday loan predators. Without strong CFPB protections at a national level, state laws protecting consumers are even more critical.

“Payday lenders take advantage of working families, struggling to pay medical bills or rent, by trapping them in a seemingly endless cycle of debt,” said Congresswoman Jayapal. “I’m proud to lead this legislation with Senator Merkley and Congresswoman Bonamici that would protect consumers across the country by closing loopholes, increasing transparency, and putting an end to these predatory lending practices. Congress has a responsibly to protect hardworking people from bad actors, and that’s exactly what we will accomplish with our SAFE Lending Act.”

“Predatory payday lenders trap hardworking Americans in an inescapable vortex of debt,” said Senator Merkley. “Before we kicked payday lenders out of Oregon, they preyed on families in my blue-collar neighborhood. As Trump and Musk scheme to undermine the agency that protects consumers from scammers, we’re taking on the shady companies directly. It’s time to break this cycle of endless debt for families across America.”

“No one should be stuck in a cycle of debt during times of financial distress,” said Congresswoman Bonamici. “The SAFE Lending Act will put an end to the unscrupulous practices predatory payday lenders use to take advantage of people who are financially vulnerable.”

In addition to Merkley, Bonamici, and Jayapal, the SAFE Lending Act is co-sponsored by U.S. Senators Bernie Sanders (I-VT), Ron Wyden (D-OR), Chris Van Hollen (D-MD), Dick Durbin (D-IL), Richard Blumenthal (D-CT), Tina Smith (D-MN), Edward J. Markey (D-MA), Cory Booker (D-NJ), and Tammy Baldwin (D-WI) and U.S. Representative Jan Schakowsky (D-IL-09).

The SAFE Lending Act is supported by Americans for Financial Reform, Oregon Consumer Justice, National Consumer Law Center (on behalf of its low-income clients), Consumer Federation of America, UnidosUS, Main Street Alliance, and National Association for Latino Community Asset Builders.

“Many individuals who take out online payday loans are already living paycheck to paycheck and may be one junk fee away from a never-ending debt trap,” said Christine Chen Zinner, senior policy counsel at the Americans for Financial Reform. “The SAFE Lending Act simply makes sure that these risky online payday loans are compliant with state law, transparent, and not laden with junk fees.”

“Oregonians deserve a financial system that creates opportunities for them to succeed. Yet, loophole lenders use deceptive practices to work around our state laws and exploit consumers, including through unauthorized bank account withdrawals and overdraft fees on prepaid cards. The SAFE Lending Act is needed to enforce transparency and keep consumers in control of their money,” said Chris Coughlin, Policy Director for Oregon Consumer Justice. “The Act looks to the Consumer Financial Protection Bureau to provide strong federal lending regulation—it is essential that the CFPB be unimpeded in its critical mission of protecting consumers from predatory lending practices that could otherwise go unregulated.”

“Most people understand the costs of payday loans,” said Adam Rust, director of financial services for the Consumer Federation of America, “but fewer may be aware of how abusive debt collection practices and data-harvesting online lead generators add to the problems. By preventing robo-debiting of accounts and outlawing lead generators that sell loan applications to the highest bidder, the SAFE Lending Act will throttle business tactics that strip wealth and expose private financial information.”

A one-page summary of the SAFE Lending Act can be found by clicking here.

Full text of the bill can be found by clicking here.