SCOTUS to take up predatory lending case, as Virginia advocates worry about repercussions
Critics of high-interest loans in Virginia and elsewhere are closely watching a case now before the Supreme Court. As Michael Pope reports, oral arguments are scheduled Tuesday.
A coalition of payday lenders is challenging the constitutionality of the Consumer Financial Protection Bureau, which was set up in a way to make sure its funding source is protected from Congress. Now, consumer advocates here in Virginia who have worked against payday loans and car title loans and high-interest online loans; they’re worried about what might happen if the court rules against the bureau.
"It is helpful to help with these kinds of products that do undermine our Fairness in Lending Act, which passed in 2020 and has been fairly successful to keep credit available without the more predatory aspects of it," says Dana Wiggins at the Virginia Poverty Law Center.
Jennifer Mandelblatt at the advocacy group United for Democracy says she'll be listening very closely to the oral arguments to get a sense of what might happen to protections that currently exist against predatory lending.
"The protections that students face when they’re taking out loans to make sure that they are getting a fair deal, that homeowners are counting on to ensure they are getting a fair deal -- all of that is at risk because this case is about putting predatory payday lenders and their rights above our rights," Mandelblatt says.
Virginia Attorney General Jason Miyares is siding with the payday lenders, arguing in an amicus brief that the way the Consumer Financial Protection Bureau was set up "casts separation of powers to the wind and avoids any real accountability."