Testimony on HB1270 to stop predatory lending

We strongly support HB1270 as an essential measure to stop predatory lenders from harming our state’s citizens by closing a loophole the lenders are using to bypass our usury cap.

We strongly support HB1270 as an essential measure to stop predatory lenders from harming our state’s citizens by closing a loophole the lenders are using to bypass our usury cap.

Consumer advocates have worked hand-in-hand with Maryland lawmakers over the years to develop strong consumer protection laws, and we thank you for you work on this issue over the years. For years, payday lending companies, intent on predatory abuses and often from out-of-state, have repeatedly attempted to weaken or gut those protections. Each time, we have come together to reinforce our strong, shared value: a state free from financial predation, a state that seeks to clear the way for families to build secure financial foundations and have a fair chance for their families’ success and economic advancement. We must act once again to preserve this proud history.

The Consumer Financial Protection Bureau (CFPB) was created by the federal government after the 2009 financial crisis. One thing they have done is collect consumer complaints from around the country in order to hold lenders accountable.

Through CFPB data collection there is clear evidence that people are already being harmed by the loans made through this loophole. The Consumer Financial Protection Bureau has received multiple complaints about this usurious product from Maryland residents, even though the companies making these loans have been making loans in our state for very long. Their stories demonstrate how bad their experiences have been with these predatory loans.

The Marylanders describe repaying the principle of their loans three to four times, without fully paying off the loan. One consumer described paying $1900 in fees, with $300 still outstanding to pay. Says that consumer, “This is nothing more than a loan sharking operation which has assessed (sic) over 300% in fees and interest”.   

The longer these predatory lenders are allowed to operate in Maryland, the more they will get entrenched in our communities, ensnaring more and more working families, veterans, elderly and others in cycles of debt. Please move quickly to shut off the statutory access to our vulnerable communities, and bring this type of product under the usury cap, so that our state’s consumer protections remain legitimate and functional.

We respectfully request a favorable report.


Emily Scarr

State Director, Maryland PIRG; Director, Stop Toxic PFAS Campaign, PIRG

Emily directs strategy, organizational development, research, communications and legislative advocacy for Maryland PIRG. Emily has helped win small donor public financing in Baltimore City, Baltimore County, Howard County, Montgomery County, and Prince George's County. She has played a key role in establishing new state laws to to protect public health by restricting the use of antibiotics on Maryland farms, require testing for lead in school drinking water and restrict the use of toxic flame retardant and PFAS chemicals. Emily also serves on the Executive Committees of the Maryland Fair Elections Coalition and the Maryland Campaign to Keep Antibiotics Working. Emily lives in Baltimore City with her husband, kids, and dog.

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