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I joined President Obama when he came to Birmingham in late March to push for tougher requirements for payday lenders. On the same day, the Consumer Financial Protection Bureau (CFPB) unveiled its proposals to protect consumers against predatory lending practices.

One of the key provisions of the CFPB requires lenders to assess whether borrowers have the ability to repay the loan on time. It is a fundamental element of any responsible loan. However, many payday lenders often lend based on their ability to collect the debt and put themselves first in line by tapping into the borrower’s checking account as soon as the borrower receives a paycheck or government benefits. These types of common sense reforms are long overdue and I am encouraged by the CFPB’s progress.

{mosads} Sixty-eight members of Congress joined me in sending a letter to CFPB Director Richard Cordray expressing our support for the CFPB proposals. We urge the industry to work with the CFPB to end unfair and abusive lending practices.

Predatory lending jeopardizes the financial security of millions of Americans, and it’s too big a problem to ignore. Payday loans, vehicle title loans, and check loans are marketed as easy access to quick cash, but these short-term loans often lead to a cycle of long-term debt. Tougher regulations are needed to protect hard-working Americans like Alicia, a constituent of mine, from predatory lending practices.

Alicia needed extra money to help cover her expenses after graduating from nursing school. She took out a short-term loan of $500, but she couldn’t meet the interest payments of $85 due every two weeks. To avoid falling further behind, she took out two more loans worth $500 and worked extra shifts so she could make the payments. Alicia eventually paid $2,945, nearly double the amount she originally borrowed, to get out of debt.

Alicia’s story reflects the financial hardship caused by predatory lending, and the numbers further illustrate the problem. Short-term loan interest rates average 322%, bringing the cost of a $1,000 loan to $3,220 over the course of a year. In my home state of Alabama, the typical annual percentage rate (APR) for these types of short-term loans is 456%, which brings the cost of a loan from $1,000 to $4,560. $!

The cost of credit is a huge burden on borrowers, and around 80% of short-term loans are integrated or followed by a similar loan within two weeks. It’s a difficult cycle to break – borrowers take on more debt due to high interest rates and take out additional loans to cover the first.

Short-term lenders claim that their products are intended to provide short-term credit for a one-time expense or temporary financial difficulty. Yet few lenders have provisions in place to determine whether borrowers are indeed experiencing a temporary shortfall or whether borrowers are using loans as rolling income.

These types of loans specifically target financially vulnerable communities where residents have limited access to traditional bank loans or credit. A disproportionate number of these borrowers are African American or Latino, and the average income for all borrowers is $22,476.

In Alabama alone, payday lenders collected a staggering $232.1 million in fees last year. When Obama visited my congressional district in late March to discuss payday loans, he noted that there were four times as many payday lenders in Alabama as there were McDonald’s. There’s a payday lender on every corner in parts of my district — and I want the bad actors in this industry to know that my constituents aren’t their prey.

Sewell represented Alabama’s 7e Congressional District since 2011. She serves on the Financial Services and Intelligence Committees.