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CPC, CBC, CHC, and CAPAC Call for Strong Standard on Payday Loans

March 9, 2015

WASHINGTON-Congressional Progressive Caucus (CPC) Co-Chairs Reps. Raúl M. Grijalva (D-AZ) and Keith Ellison (D-MN), Chair of the Congressional Black Caucus G. K. Butterfield (D-NC), Chair of the Congressional Hispanic Caucus (CHC) Linda Sánchez (D-CA), and Chair of the Congressional Asian Pacific American Caucus (CAPAC) Judy Chu (D-CA) sent a letter last week to Consumer Financial Protection Bureau Director Richard Cordray calling for a strong national standard for payday loans.

The text of the letter is below and a PDF copy can be found here.

 

The Honorable Richard Cordray

Director

Consumer Financial Protection Bureau

1700 G Street, NW

Washington, D.C.  20552

 

Dear Director Cordray:

We are writing in support of strong, effective rules governing payday loans. The Consumer Financial Protection Bureau (CFPB) has a responsibility to protect consumers from these predatory and exploitive financial products, and we urge you to implement rules that would prohibit fraudulent and abusive payday loans that threaten the economic well-being of so many Americans, especially those from low-income communities of color.

While several states have recently passed new laws and others have increased the enforcement on the abusive nature of these loans, the need for federal regulation is pressing. As of 2014, at least 36 states still permit these abusive loans, and many do so without restriction.[i]  Moreover, the prevalence of internet payday lending has grown tremendously in recent years. In fact, one in every three payday loans originates online, some with rates as high as 700% APR or more.[ii]    

What is particularly concerning is that payday lenders target low-income communities and communities of color. According to a four state study conducted by Howard University’s Center on Race and Wealth, 12 million people living in low-income communities use payday loans annually. Those individuals averaged eight payday loans each year with an average interest rate of 400 percent for each loan. Nearly 90 percent of payday lenders referenced in the study were located in low-income communities of color.

The prevalence of such predatory and abusive practices is unacceptable. The payday loan industry robs borrowers of the opportunity to secure a foothold in the mainstream financial services market by locking borrowers into a long-term debt trap and by increasing the likelihood that a borrower will suffer other harmful financial consequences, such as bankruptcy, excessive overdraft fees, and involuntary bank account closures. The resulting adverse impact on credit scores, which lenders use to determine a borrower’s eligibility, can make it even harder for individuals to avail themselves of mainstream financial services. This means that the millions of individuals from low-income communities and communities of color are further disadvantaged and further unable to break free of existing socio-economic barriers.

That is why we need a clear, consistent, national standard that ensures that no one in this country is subject to predatory lending practices. To that end, we urge the CFPB to implement rules to stem predatory practices that are based on exorbitant interest rates and fees that draw consumers into a harmful cycle of repeat lending. Specifically, we ask that the CFPB meaningfully reform the marketplace by implementing rules governing both storefront and online payday lending that would:

1.    Require the lender to determine the borrower’s ability to repay the loan, including consideration of both income and expenses;

2.   Not sanction any series of repeat loans or provide any safe harbor;

3.   Recognize that borrowers need small dollar loans with good terms, not short-term loans that are difficult for them to repay. The CFPB should establish an outer limit on length of indebtedness that is at least as short as the FDIC’s 2005 guidelines – 90 days in a twelve-month period; and

4.   Prohibit lenders from using post-dated checks of electronic access to a borrower’s checking account as evidence of ability to repay the loan.

We thank you for your leadership and consideration of our suggestions for strong protections for consumers in the financial market. We look forward to working with you and the Bureau to establish clear rules for the payday lending industry in order to protect consumers from products that have been shown to be financially damaging.

Very truly yours,

[i] The Pew Charitable Trusts, How State Rate Limits Affect Payday Loan Prices, April 10, 2014, available at http://www.pewtrusts.org/en/research-and-analysis/fact-sheets/2014/04/10/how-state-rate-limits-affect-payday-loan-prices.

[ii] The Pew Charitable Trusts, Key Findings About Internet Payday Lending: Harmful Practices, Fraud, and Abuse Abound in a Growing Industry, Oct. 02, 2014, available at http://www.pewtrusts.org/en/multimedia/data-visualizations/2014/key-findings-about-internet-payday-lending.

Progressive Caucus Releases Trade Principles that Put Workers First in Trade Agreements

March 4, 2015

WASHINGTON –The Congressional Progressive Caucus (CPC) released broad principles today to establish standards for U.S. trade policy that put workers first, balance trade deficits, and improve labor and environmental protections around the world. The Congressional Progressive Caucus believes it is possible to negotiate a trade agreement that doesn’t replicate the mistakes of the past, and instead creates a new model for trade, promoting balanced growth for the global economy.

The text of the executive summary is below and the full version can be viewed here. 

Principles for Trade: A Model for Global Progress

America’s current trade policy fails working families while increasing profits for the world’s largest corporations. Trade agreements should create a net increase of good American jobs, spur more balanced trade between partners, and improve governance, public health, and environmental protections around the world. The Congressional Progressive Caucus believes the following principles can ensure fairer trade agreements by prioritizing middle class families and removing special protections and privileges for corporations:

  • Protect Congress’ Authority to Set Trade Policy
  • Restore Balanced trade
  • Put Workers First
  • Stop Currency Manipulation
  • Expand Buy America Procurement Practices
  • Protect the Environment for Future Generations
  • Prioritize Consumers above Profits
  • Protect Nationhood Rights
  • Secure Affordable Access to Essential Medicines and Services
  • Respect Human Rights
  • Provide a Safety Net for Vulnerable Workers

Since implementation of the North American Free Trade Agreement (NAFTA) in 1994, the United States has lost millions of jobs in key sectors like manufacturing, wages have stagnated, and the standard of living for working families has dropped.

Outside of the United States, misguided trade policies are devastating both rural and urban communities in emerging nations, from the displacement of millions of small farmers in Mexico to low wages and terrible conditions for garment factory workers in Honduras.  Trade agreements that destroy local livelihoods and provide workers with little economic opportunity create strong incentives for immigration to the United States. U.S. trade policy must focus on creating economic opportunity for working people in the United States and abroad, not only on maximizing short-term profits for large corporations.

The United States negotiates some of the world’s largest trade agreements. These deals must put working families and our environment first. The United States must stop using trade agreements as investment deals for the world’s wealthiest corporations and instead prioritize higher wages, safer work and environmental standards, and a healthier world economy.

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Progressive Caucus Applauds FCC on Net Neutrality Ruling

February 26, 2015

WASHINGTON – Congressional Progressive Caucus (CPC) Co-Chairs Reps. Raúl M. Grijalva (D-AZ) and Keith Ellison (D-MN) released the following statement after the Federal Communications Commission (FCC) voted today to approve Chairman Wheeler’s proposal protecting net neutrality through Title II reclassification of Internet access.

“We applaud the FCC for supporting an open and free Internet. After millions of comments from people all across the country, the FCC has validated their voices and ensured the Internet remains the democratic platform it is today.

“The Internet provides a space for free expression, and makes room for voices that are shut out of mainstream media.  Reclassifying the Internet as a common carrier prevents a handful of powerful companies from controlling how Americans access the Internet. Allowing Internet service providers to create fast lanes would give an unfair advantage to a lucky few and burden the rest of us with a slower Internet. It would also create barriers for the web entrepreneurs and innovators who have great ideas, but wouldn’t be able to compete on a pay-to-play Internet. Today's decision preserves the people's voice and allows the Internet to remain democratic and open.” 

The Congressional Progressive Caucus was an early proponent of net neutrality and led the fight in Congress by sending FCC Chairman Wheeler a letter in May of 2014 and later sending comments to the FCC in July 2014.

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Progressive Caucus Applauds President Obama and DOL on Fiduciary Rule to Strengthen Retirement Security

February 23, 2015

WASHINGTON—Congressional Progressive Caucus (CPC) Co-Chairs Reps. Raúl Grijalva (D-AZ) and Keith Ellison (D-MN) released the following statement today after the White House announced that the Department of Labor is moving forward with a rule to expand the definition of retirement investor advisors who must put their clients’ interests first.

“We applaud President Obama and Secretary Perez's bold move to protect working Americans saving for retirement from financial advice that is not in their best interest. Every month the industry lobbyists who tried to stop this rule cost American savers as much as $1.4 billion dollars in overpaid fees and hidden commissions.  

“When workers leave a job, they can be encouraged to roll over their low-cost, quality employer-based retirement account into an IRA. Too frequently, working Americans do not realize the IRA they are being offered is actually a product that they are being sold. The product could have higher fees and worse investment options than the plan they had. Under current law, the person selling the plan to the worker does not have to put the client’s best interest first. That’s just wrong. The Department of Labor is siding with retirees to hold financial advisors to a higher standard.   

“Seniors are facing choices that will determine the security of their retirement. The rule proposed today improves the retirement investment marketplace and requires financial advisors and broker dealers to work in their client’s best interests.

“Expanding Social Security benefits, providing investor protections for consumers, and strengthening the private pension system are all important things government can do to create a system that ensures America’s seniors will be able to retire with security and dignity.  The CPC supports the President’s actions today and encourages him to propose the strongest possible rule.” 

By updating the definition to include advisors who encourage workers to roll their employer-sponsored retirement accounts, 401(k)s, 403(b)s, etc., into IRAs, the proposed rule will protect working families from high fees, hidden commissions and inferior product choices The Department of Labor will soon seek comments on a rule that promotes transparency, accountability and minimum conflict of interest. The proposed rule is expected to still allow advisors to give general advice and to give investors the option of choosing different types of fee-based advice plans. The proposed rule is not expected to prohibit commissions or revenue sharing.

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Progressive Caucus Statement on President Obama's AUMF Proposal

February 13, 2015

WASHINGTON—Congressional Progressive Caucus Co-Chairs Reps. Raúl M. Grijalva (D-AZ) and Keith Ellison (D-MN) and CPC Peace and Security Task Force Chair Rep. Barbara Lee (D-CA) released the following statement today in response to President Obama’s proposal for an authorization for the use of military force (AUMF) against ISIL. 

“The devastating and costly wars in Iraq and Afghanistan have taught us that when we give military authority to the executive, it should not be a blank check. Prolonged military action requires robust debate and authorization from Congress, so we are glad that President Obama has presented a proposal. One of Congress’s most important roles is to declare war, and an AUMF is a declaration of war.

“Unfortunately, the authorization proposed by the president this week is too broad. In order to ensure meaningful limits on executive branch authority, an AUMF should at a minimum contain a clear objective and geographical limitations. It should also include an enforceable ban on the deployment of ground troops with exception for only the most limited of operations, unambiguous language, and a repeal of the 2001 AUMF.

“The Administration has argued that the 2001 AUMF, which was designed to declare war on Al Qaeda and the Taliban shortly after the attacks of 9/11 but has since been broadly applied more than 30 times, provides the legal authority for any existing and future operations against ISIL. Until Congress declares that the 2001 AUMF does not apply to ISIL, any limitations or restrictions in the AUMF proposed by the president are irrelevant.

“An AUMF debated by Congress should also be comprehensive, and include the political, economic, and diplomatic solutions that will ultimately degrade and dismantle ISIL. We should work to cut the flow of money, weapons, and fighters to ISIL. We should push the United Nations to start negotiations to end the Syrian civil war. Most importantly, we should ensure that our humanitarian aid is not eclipsed by our military efforts.  

“In the coming weeks, the Congressional Progressive Caucus will be holding hearings and meetings on the AUMF. One thing is clear now: the conflict in Syria and Iraq requires a comprehensive solution. ISIL’s barbaric tactics are designed to pull the United States into another endless conflict. We must provide careful consideration to an AUMF, but lasting peace and stability will only come with a regional political solution.”

The Congressional Progressive Caucus led the fight for calling for Congressional debate on the use of force against ISIL. In the 113th Congress, the CPC introduced H. Con. Res. 114, which called for debate and a vote on any US sustained combat role against ISIL, supported a ban on the deployment of combat ground troops, and argued that any AUMF must be narrowly tailored and include robust reporting requirements.  CPC Peace and Security Taskforce Chair Barbara Lee recently introduced the Comprehensive Solutions to ISIL Act, which would ensure that the Administration pursues a comprehensive strategy to degrade and dismantle ISIL, repeals the 2001 and 2002 AUMFs, bars the deployment of combat ground troops, and requires the Administration to submit to Congress a “comprehensive diplomatic, political, economic and regionally-led strategy.”

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Progressive Caucus Commends FCC Chairman's Net Neutrality Proposal

February 4, 2015

WASHINGTON—Congressional Progressive Caucus Co-Chairs Reps. Raúl M. Grijalva (D-AZ) and Keith Ellison (D-MN) released the following statement today after Federal Communications Commission Chairman  (FCC) Tom Wheeler released a proposal to reclassify the internet as a common carrier, protecting net neutrality.

“Today’s victory belongs to the hundreds of thousands of Americans who wrote letters, organized protests, tweeted and demanded the FCC protect a free and open Internet. Reclassification is the only way to stop providers from increasing prices and restricting the Internet for those who can’t afford to pay for fast lanes. We applaud Chairman Wheeler’s proposal to continue the Internet’s role as an engine for democracy and free expression, and we hope the full commission approves it. Too often in Washington, D.C., only the biggest corporations get what they want. Today’s move to reclassify the Internet is proof that when we organize together we can win.”

The Congressional Progressive Caucus led the fight for net neutrality in Congress, standing with advocates, sending a letter in May of 2014 to the FCC Chairman demanding a free and open Internet, and submitting comments in July 2014. 

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Progressive Caucus Urges Senate and House Committees to Postpone New Iran Sanctions Legislation

January 27, 2015

Washington, D.C. – Congressional Progressive Caucus (CPC) Co-Chairs Reps. Raúl M. Grijalva (D-AZ) and Keith Ellison (D-MN), along with CPC Peace and Security Task Force Chair Rep. Barbara Lee (D-CA) sent a letter to Senate Committee on Banking, Housing, and Urban Affairs Chairman Richard Shelby and Ranking Member Sherrod Brown and House Committee on Foreign Affairs Chairman Ed Royce and Ranking Member Elliot Engel urging them to postpone enacting new sanctions legislation on Iran. The letter opposes sanctions that threaten to derail the P5+1 negotiations, which is an ongoing effort to prevent Iran from acquiring a nuclear weapon.

The text of the letter is below and a signed version can be found here.

 

The Honorable Richard Shelby

The Honorable Sherrod Brown

U.S. Senate Committee on Banking, Housing, and Urban Affairs

 

The Honorable Ed Royce

The Honorable Elliot Engel

House Committee on Foreign Affairs

 

Dear Chairmen Shelby and Royce and Ranking Members Brown and Engel:

We write to urge you to postpone enacting new sanctions legislation against Iran. We fully support the P5+1 effort to prevent Iran from acquiring a nuclear weapon and stand strongly opposed to legislation that threatens to derail these negotiations. Thanks to the tireless work of our diplomats and our negotiating partners, Iran’s nuclear program is frozen and there is a real prospect for peacefully ensuring Iran does not develop a nuclear weapon.

Enacting new sanctions legislation now undermines the efforts of the P5+1 and is contrary to a peaceful solution. Given the sensitive timing, Congressional action should reflect support for a negotiated settlement over the Iranian nuclear dispute rather than pushing legislation that could take us off the negotiating track and escalate towards war. There is significant risk in passing sanctions legislation now, whereas there is no risk in waiting. Congress has proved that it can quickly pass sanctions legislation if necessary.

We are unequivocal in our agreement that Iran acquiring a nuclear weapon would pose a grave threat to international peace and stability and the national security of the United States and our allies. As the IAEA has confirmed, the Joint Plan of Action (JPOA) went into effect in January 2014, Iran has complied with the preliminary agreement by terminating the enrichment of uranium beyond the 5 percent level, eliminating its stockpile of medium enriched uranium, halting progress at the Arak nuclear reactor, and allowing far more intrusive inspections from the IAEA. The JPOA has made Americans and the rest of the world safer; it does not make sense to pass new sanctions legislation when the IAEA has determined that Iran has adhered to the obligations outlined in this agreement and when negotiators are within reach of a final agreement.

The only logical reason to pass sanctions legislation now is if the goal is to derail negotiations. As Senator Tom Cotton (R-AR) recently said, “the end of negotiations isn’t an unintended consequence of congressional action; it is an intended consequence.” 1 There is widespread agreement that new sanctions legislation would compromise the negotiations, not provide leverage to negotiators.

In December National Security Advisor Susan Rice said that new sanctions on Iran would “blow up” nuclear negotiations and that “the P5+1 would fracture, the international community would blame the United States rather than Iran for the collapse of the negotiations, and the Iranians would conclude that there’s little point in pursuing this process at the negotiating table.”2 Last week Israeli Mossad chairman Tamir Pardo echoed Rice, saying a new sanction bill would be “like throwing a grenade into the process.”3 Sanctions may have brought Iran to the table, but they aren’t keeping them there— negotiators are doing that.

A diplomatic solution to preventing Iran from getting a nuclear weapon is in the best interest of U.S. national security. During his Congressional testimony Ambassador Tom Pickering noted that “without a realization to reach a negotiated agreement, the U.S. may be left with two unpalatable options: containing a nuclear armed Iran or war.”4

We are committed to ensuring that a diplomatic solution succeeds and will not support legislation that compromises nuclear negotiations with Iran. We stand ready to urge the Congressional Progressive Caucus to sustain a veto of harmful legislation.

In the event that a final status agreement is reached, we are prepared to work with the Administration to repeal sanctions legislation in accordance with the terms of such an agreement upon stringent verification that Iran has adhered to its obligations.

Our negotiators need support from Congress to accomplish the objective shared by lawmakers, the Administration, and the American people, which is to peacefully prevent a nuclear-armed Iran.

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1 Tom Cotton remarks, http://www.armscontrol.orglissue-briefs/20 15-01 -15/Congress-Should-Support-Negotiations-Not-New-Iran-Sanctions

2 Susan Rice remarks, http://thehill.comlpolicy/internntionall2257s9-rice-new-sanctions-would-blow-up-iran-talks ~

3 Tamir Pardo remarks, http://www.bloombergview.comlarticles/2015-0 I -22/netanyahu-mossad-split-divides-u-s-congress-on-Iran-sanctions

4 Tom Pickering testimony, http://iranprojectfcsny.org/ambassador-thomas-pickerings-testimony-to-the-u-s-armed services-committee/

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Progressive Caucus Statement on President Obama's State of the Union Address

January 21, 2015

WASHINGTON – Congressional Progressive Caucus (CPC) Co-Chairs Reps. Raúl M. Grijalva (D-AZ) and Keith Ellison (D-MN), released the following statement after President Obama delivered his seventh State of the Union address. 

 

“President Obama laid out a robust agenda tonight to make our economy work for everyone. The president’s proposals to create opportunity for hard-working Americans are encouraging steps towards making 2015 the last year the term ‘low-wage worker’ is used in the wealthiest nation in the world. 

 

“Working Americans are better off today than they were during President Obama’s first State of the Union, and much of what he outlined tonight will continue that record of success. We applaud the president’s plan to raise the capital gains tax to support investments in working families; we hope that he will stand strong on comprehensive tax reform that raises revenue to reverse our upside-down tax policy. His call for family and sick leave will go a long way to making life easier for working families. The president’s proposal to cut methane emissions and his continued push for a strong carbon rule are important efforts to stop a changing climate. 

 

“Too many Americans are struggling to afford basic necessities and find good-paying jobs. Congress must act to end harmful budget cuts, expand Social Security benefits, increase access to affordable higher education, and put Americans back to work by rebuilding our roads, schools and bridges. But putting working families first also means we cannot enter into trade deals that allow corporations to ship jobs overseas. The Congressional Progressive Caucus will not support a trade deal that increases trade deficits and undermines the security of the middle class. 

 

“The president showed strong leadership in 2014 and tonight he laid out a concrete path towards a stronger and more inclusive economy in 2015.  We support his executive action in the face of Republican intransigence, and look forward to working with his administration to continue expanding our middle class.” 

 

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Progressive Caucus Statement on the 5th Anniversary of Citizens United

January 20, 2015

Washington, D.C. – Congressional Progressive Caucus Co-Chairs Reps. Raúl Grijalva (D-AZ) and Keith Ellison (D-MN) released the following statement on the fifth anniversary of the Supreme Court’s ruling in Citizens United v. FEC.

 

“It has been five years since the Supreme Court gave corporate money unlimited influence over our elections,” said Reps. Grijalva and Ellison. “Since then, corporations, special interests, and the mega-rich have spent millions of untraceable dollars to flood our electoral process – effectively silencing the American people.”

 

“In the 2014 midterms alone, Super PACs spent more than $170 million dollars influencing electoral outcomes. Corporations are not people and elections should never be bought. Campaign contribution limits were set for a reason: to protect the voice of the people. It’s time we amend the constitution to overturn the Citizens United to end the influence of dark money over our political process and prove once and for all that the will of the American people is not for sale to the highest bidder.” 

 

In 2012, the Congressional Progressive Caucus formally adopted a declaration stating:

 

“We declare our support for amending the Constitution of the United States to restore the rights of the American people, undermined by Citizens United and related cases, to protect the integrity of our elections and limit the corrosive influence of money in our democratic process.” 

 

Rep. Ellison also introduced the Get Corporate Money out of Politics Constitutional Amendment (H.J. Res. 92) in 2012, which Rep. Grijalva co-sponsored. The Amendment reaffirmed the importance of a level playing field and authorized Congress and the States to regulate election contributions of for-profit corporations. 

 

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Progressive Caucus Applauds President on Paid Leave Initiatives

January 16, 2015

WASHINGTON, DC – Congressional Progressive Caucus (CPC) Co-Chairs Reps. Raúl M. Grijalva (D-AZ) and Keith Ellison (D-MN), released the following statement after the President announced initiatives to push for paid leave including directing federal agencies to allow workers to use up to six weeks after the birth or adoption of a child. 

“We applaud President Obama for his push for paid leave and support of the Healthy Families Act. The wealthiest nation must join the rest of the world in affording mothers and fathers time to spend with their children.  Whether it is for birth or to care for a sick child, there is no question about what is right for American families.

“Offering adequate paid leave is not just morally right, it’s economically smart. Many Americans face the dilemma of what to do when they themselves or a member of their family is sick. Workers without paid sick days must choose to go to work sick or stay home and risk their pay and possibly their job. Allowing paid leave prevents the spread of illness and increases workforce productivity, which benefits employers.

“Paid leave is not a progressive issue—it is a family issue. American workers should never be forced to choose between their jobs and the health of themselves or their families. There is absolutely no reason that Speaker Boehner should not support paid sick and family leave. We urge our friends across the aisle to join us and swiftly pass the Healthy Families Act.” 

CPC member Rep. Rosa DeLauro (D-CT) first introduced the Healthy Families Act in 2005, and has reintroduced the bill in every Congress since then. Currently, only three states – California, New Jersey and Rhode Island – offer paid family and medical leave, and one state, Massachusetts will start offering paid sick days in July 2015.

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