President Obama Delivers Remarks on Protecting Consumers from Abusive Payday Lending Practices

The President: Hello, Alabama! (applause) Hello, Lawson
State Community College! (applause) Well,
it’s good to be here. Thank you so much. Audience Member: We love you! The President: I love you back! I do! Thank you. (applause) Everybody,
have a seat. Have a seat. I’m going to talk for a second. Everybody please give Ollie a
big round of applause, please. (applause) I felt a little bad
because Ollie said “a man who needs no introduction,”
so I started walking out. (laughter) Then it turned out
she had a little introduction. (laughter) But it is
wonderful to be here. Let me just say, first of
all, thank you to Dr. Ward — (applause) — who is
not only your president; we named him a White House
“Champion of Change” for the very work he’s done
here at Lawson State. (applause) We’ve got two
outstanding public servants here as well — Congresswoman
Terri Sewell is here. (applause) Where’s Terri? I don’t even see her. Audience Member: Over here! The President: There she
is — she’s way over there. And your Mayor, William
Bell, is in the house. (applause) So I’m here, Birmingham, to just
acknowledge that I didn’t have UAB making it out
of the first round. (laughter) The President: My
bracket is so busted. (laughter) But, UAB, that’s
a great accomplishment. I want to congratulate them. (applause) It’s also great to be
with students like those here at Lawson State, at
community colleges. (applause) I’m
proud of all of you. I’m proud of you making this
investment in yourselves. What you’re doing takes
effort and persistence. And it takes faith in the idea
that no matter how you started, no matter where you come from,
no matter what zip code you were born in, in America if you
work hard you can get ahead. (applause) I think it was
yesterday I saw a story where someone said that a visit from
the President is a “potential game-changer” for
the neighborhood. I don’t know if just one
visit is a game-changer, but it’s nice to be with you. The real game-changers for any
neighborhood, for any community, are the people there, the
folks who, day in, day out, are doing the work, and raising
families and participating in the community, and through their
churches and faith institutions are trying to provide that
optimism and that lift. And the young
people who are here, you’re the game-changers — — because what you’re studying and your ability
to then apply that learning, that’s going to
make a difference. The love we put into our
families and our communities every day, and embracing
the joys of citizenship and participation — that’s
what is a game-changer. That’s what makes a difference. Now, I won’t deny I
can help a little bit. (applause) I can maybe make
a little bit of difference. And today, I want to talk about
what we can do as a country to reward hard work, and
keep the economy growing, and make sure that new jobs
and opportunities exist. The good news is, right now,
we’re on a 60-month streak of private sector job creation
— (applause.) Sixty months, We’ve created 12
million new jobs. Nationwide, the unemployment
rate has fallen — when I came into office, that first
year it was 10 percent; now it’s 5.5 percent. (applause) There are more job
openings than at any time since 2001. Meanwhile, our high school
graduation rate is up, at an all-time high. (applause) More than 16 million
Americans have gained the security of health insurance. (applause) We’re producing more
energy than ever before — oil and gas, but also wind
power and solar power. Meanwhile, lower gas prices
should save the typical family this year about
$700 at the pump. (applause) And the good news
is wages are even on the rise again, and that’s going
to help a lot of families. (applause) So it’s been a long, hard road. But thanks to the hard work
of the American people, America is coming back. So the question now is,
where do we go from here? Do we accept an economy where
just a few people do really, really well? Or are we going to keep building
an economy that generates opportunity for everybody
who’s willing to work? (applause) And what I believe is, is that
America does best when the middle class does better, and
when ordinary folks who maybe were born into poverty are able
to climb their way into the middle class, that’s
good for everybody. The economy grows best
not from the top down, but from the bottom up
and from the middle out. (applause) So what we’ve been pushing
is what I call middle-class economics — the idea that the
country does best when everybody has got a fair shot, everybody
is doing their fair share, everybody is playing
by the same rules. And we want not only everybody
to share in America’s success but contribute to it, because we
know that if you field the team and only half the
folks get to play, that team will be
less successful. If everybody is playing a part,
that team is going to be more successful. So what does middle-class
economics mean in this new economy? It means that every American has
to have the tools to get ahead in a fast-paced, constantly
changing global economy. That means that we’ve got to
make sure that working families feel more secure, that their
paychecks can go a little farther, that they’re getting
things like paid leave and child care not as luxuries but because
they help support families, that we treat those things as
priorities for working moms and working dads. It’s time to follow the example
of states and cities and companies that are raising
America’s minimum wage. That will make a difference. (applause) It means preparing
Americans to earn good jobs and higher wages, which means every
child getting a great education at the earliest age. (applause) Making college more
affordable so young people can afford to go to college without
getting burdened with debt. (applause) It means working with businesses
to provide apprenticeships and on-the-job training and other
paths into the middle class. And I want to bring down the
cost of community college to zero. (applause) Two years of
community college should be as free and universal as
high school is today. If we’ve got the best-trained
workforce in the world, then businesses will
come to Alabama. They’ll come to Birmingham. They’ll come to America. And we will succeed. (applause) Middle-class economics means
building the most competitive economy anywhere, so we can keep
churning out high-wage jobs for the workers to fill. I want to put more people back
to work rebuilding our roads and our bridges, modern ports — (applause) — faster trains, faster Internet. We should invest
in those things. They pay off many times over. I want to invest in basic
research so that jobs and industries of the future take
root here because we’ve invented new products and new
services, and innovated. And we can pay for these
investments without blowing up our deficits. We just need to reform our tax
code so it helps middle-class families get ahead instead of
letting folks who already got a lot get ahead. (applause) And I have to say, these
ideas are not about ideology. The reason I’ve proposed these
ideas is because we know they work. Now, let me talk about
Washington for a second. (laughter) Let me just talk
about Washington for a second. The good news is that today the
House of Representatives passed a bill. (laughter) No, no. You think I’m joking. I’m not. (laughter) It was a bipartisan
bill designed to make sure that doctors in our Medicare
system get paid on time; that the Children’s Health
Insurance Program continues to work. I called the Speaker,
John Boehner, and the Democratic Leader,
Nancy Pelosi, and I said, congratulations, this is how
Congress is supposed to work. They came together;
they compromised. (applause) They had a good idea. They didn’t get
everything they wanted. They passed a bill. Now the Senate hopefully
will pass the bill, and I’ll get to sign it, and the
American people will be better off for it. And I thought, this is great. Let’s do more of this. (applause) Let’s make it happen. So I want to give John Boehner
and Nancy Pelosi credit. They did good work today. And they deserve credit, and
the House of Representatives deserves credit for that. (applause) So that was the good news. (laughter) The bad news is the
Republicans in Congress unveiled their budget, and it represents
the opposite of middle-class economics, because it would
hand out new tax cuts for millionaires and billionaires,
let taxes go up for students and working families because it
would eliminate their tax credits on a variety of things. It would cut investments in
education to the lowest level since the year 2000. It would double the number
of Americans without health insurance. And so you look
at it and you say, what are you trying to
solve with this budget? They say the reason they wanted
this budget is because we’ve got to do this to eliminate
deficits and debt. Now, keep in mind, the deficit
has come down by two-thirds since I’ve been President. (applause) It’s come
down by two-thirds. And the budget I put forward
would continue to keep deficits low. But let’s take
them at their word. They said they wanted
to reduce the deficit. Before the ink was even dry on
the budget that they put forward that was already full of tax
cuts for folks at the top, they rolled out their
next big economic plan, which was another huge tax
cut for folks at the top. This one would
cost $250 billion. It would apply only to the
top one-tenth of 1 percent of Americans. In Alabama, this new tax cut
they’re proposing — I’ve got to laugh because it would average
$2 million per person in tax cuts, and it would apply to less
than 50 people per year here in Alabama. The President: So 50 people
would get an average tax break of $2 million. Not 50,000 people — 50. Audience Member: “Fiddy.” The President: “Fiddy.” (laughter and applause.) Now, what would lead you — when
you’re saying you’re concerned about the deficit, what would
lead you to put in your budget and then propose right after
your budget something like that? I mean, did they look at the
budget — they already got tax cuts for the wealthy, for
millionaires and billionaires, and then they say, you know
what we forgot to put in here? Another deficit-busting tax
cut for the top one-tenth of 1 percent of Americans. That’s what’s really going
to move the country forward. Is that what they were thinking? I guess. (laughter) I don’t think our
top economic priority should be helping a tiny number of
Americans who are already doing really, really well, and then
asking everybody else to foot the bill. (applause) And keep in mind,
one of the things about being President, you meet people
from all walks of life. You meet folks with
very modest incomes. You meet the wealthiest
people in the world. And let me just say, some of
these folks at the very top, the top one-tenth of 1
percent, are wonderful people. Warren Buffet is a
great friend of mine. They’ve done amazing things. They’ve invested. They’ve created businesses. They deserve great success. But they really
don’t need a tax cut. (laughter) And if you talk to
them, they’ll tell you, “I already got a couple planes,
I already got a boat — (laughter) — I already got five
or six houses — I’m okay.” (laughter) And the idea that you
would do it at the same time as you’re eliminating tax credits
for students or working families — that doesn’t make sense. Our top priority should be
helping everybody who works hard get ahead. It doesn’t mean
everybody is going to be equal. It doesn’t mean that we’re going
to punish people who started businesses and taking risks. They should be rewarded. But we want to make sure
everybody has a chance to do okay if they’re working hard. And that brings me to one of the
main reasons that I’m here in Birmingham today. One of the main ways to make
sure paychecks to go farther is to make sure working families
don’t get ripped off. (applause) Right? And that’s why we’ve taken action to protect Americans from financial advisors who don’t
necessarily have the interests of their clients at heart. That’s why we’ve taken steps to
protect student borrowers from unaffordable debt. We want them to know
before they owe. It’s why, five years ago, we
passed historic Wall Street reform to end this era
of “too big to fail, ” where banks on Wall Street,
some of them would make reckless bets, and then everybody else
would have to clean up after them. And why we’ve been working to
protect people so that they understand mortgages, and they
don’t buy homes they can’t afford and end up in a situation
not only hurting themselves, but hurting the
financial system. And that’s why, as
part of this reform, we created an independent
consumer watchdog with just one mission, and that is to
look out for all of you. And it’s called the Consumer
Financial Protection Bureau — or CFPB. (applause) Now, these
folks — the CFPB, it hasn’t been
around a long time, but because of the work they’ve
done — it’s not a big agency, but they’ve already put over $5
billion back into the pockets of more than 15 million families. (applause) Because they’ve taken
on unfair lending practices and unscrupulous mortgage brokers. And they’ve gotten
refunds for folks, and are working with state and
local officials to make sure that people are protected when
it comes to their finances. Because if you work hard, you
shouldn’t be taken advantage of. (applause) And today, they’re taking new
steps towards cracking down on some of the most abusive
practices involving payday loans and title loans. (applause) Now, Ollie was talking about
this in a very personal way. I want to just break
this down for folks. Every year, millions of
Americans take out these payday loans — here in Alabama, there
are four times as many payday lending stores as
there are McDonald’s. Think about that. Because there are a
lot of McDonald’s. (laughter) There are four times
as many payday loan operations here in Alabama as
there are McDonald’s. Now, what they’ll say, the folks
who run these things — in theory, what they’ll say is
these loans help you deal with a one-time expense. So your car breaks down, you got
to get to work; you go there, cash a check real quick,
or get a quick loan, and then that’s the end of it. In reality, most payday loans
aren’t taken out for one-time expenses. They’re taken out to
pay for previous loans. You borrow money to pay for the
money you already borrowed. As Ollie will tell you,
before you know it, you find yourselves
trapped in a cycle of debt. At first it seems
like easy money. But the average borrower ends up
spending about 200 days out of the year in debt. You take out a $500 loan at the
rates that they’re charging in these payday loans — some cases
450 percent interest — you wind up paying more than $1,000 in
interest and fees on the $500 that you borrowed. We were hearing a story from
some of the advocates who were working here in Alabama, a
story about a family — the grandmother died,
matriarch of the family. She passed away. They don’t have quite enough
to pay for the funeral. They go to a payday loan,
borrow for the funeral; can’t pay back the loan in time;
the family’s car gets taken away. And the two folks who are the
breadwinners in that family lose their jobs because
they can’t get to work. Right? So what started off as a
short-term emergency suddenly becomes a catastrophic financial
situation for that family. And you don’t need to be a math
genius to know that it’s a pretty bad deal if you’re
borrowing $500 and you have to pay back $1,000 in interest. So I just met with faith leaders
and consumer advocates and civil rights leaders here in Alabama
who are coming together to change that. And I want to say that this
is a bipartisan effort. You’ve got some very
conservative folks here in Alabama who recognize —
they’re reading their Bible, they’re saying, well,
that ain’t right. (Laughter and applause.) Right? I mean, they’re saying the Bible
is not wild about somebody charging $1,000 worth of
interest on a $500 loan. Because it feels like you’re
taking advantage of somebody. If you’re lending to somebody,
knowing they can’t pay you back, and you’re going to put them on
the hook and just squeeze them harder and harder and harder and
take more and more money out of them, you’re taking
advantage of them. And so I’m very proud of the
bipartisan effort here in Alabama to try to change this. But I want everybody to know
they’re not going to have to fight alone. Because at the federal level,
the Consumer Finance Protection Bureau, the CFPB, announced
today that it’s going to take important steps towards
protecting consumers from getting stuck into
these cycles of debt. (applause) And the idea is pretty common
sense: If you lend out money, you have to first make sure that
the borrower can afford to pay it back. Don’t lend somebody money if you
know they can’t pay it back. As Americans, we don’t mind
seeing folks make a profit. And if somebody lends you money,
then we expect you to charge interest on that loan. But if you’re making that
profit by trapping hardworking Americans into a
vicious cycle of debt, you got to find a
new business model. You got to find a new
way of doing business. (applause) So this is just one more way
that America’s new consumer watchdog is making sure more
of your paycheck stays in your pocket. And in the meantime, we’re also
going to be working to educate folks on how to think
about their money. We were talking to Dr. Ward, and
through the community college process, through consumer
advocates at the local level, in the high schools, we need to
be teaching young people the dangers of taking out
too much consumer debt. (applause) And this is one more way that
Wall Street reform — what we passed five years ago — is
protecting working families and taxpayers. And that strengthens
the economy. And that’s one more reason why
it makes no sense that the Republican budget would make it
harder for the CFPB to do its job, and would allow Wall Street
to go back to the kind of recklessness that led to the
crisis in the first place, and would allow these kinds of
lenders who are not doing the right thing to keep at it. I have to be clear: If
Republicans in Congress send me a bill that unravels the
reforms we’ve put in place, if they send me a bill that
unravels Wall Street reform, I will veto it. (applause) And this is not about politics. It’s about basic values
of honesty and fair play. It’s about the basic bargain
that says, here in America, hard work should pay off,
responsibility should be rewarded. One of the people who I met with
was Reverend Shannon Webster of Birmingham’s First
Presbyterian Church. Where’s the pastor? He’s here somewhere. There he is, in the back. Stand up so everybody
can see you. (applause) So Pastor Webster is
one of the pastors leading the effort to protect
consumers here in Alabama. And at a public hearing
a few years ago, he explained why he decided to
work on this issue: “When our people are trapped in debt,”
he said, “they cannot escape, and we’re all hurt.” We’re all hurt. And that’s a simple statement,
but it captures so much of what it means to be an American. We are a nation of
rugged individuals. We don’t expect folks
to give us a handout. We expect people to work hard. We expect that hard
work to be rewarded. If you’re out there and you’re
working hard and starting a business, and doing the right
thing and looking after your family, and not spending
beyond yours means, folks like that shouldn’t be
punished or expected to pay for everybody else. We expect everybody
to be responsible. But we’re also our
brother’s keeper. We’re also our sister’s keeper. (applause) We’re also a country
that was built on the idea that everybody gets a fair shot and
that we put laws in place to make sure that folks
aren’t taken advantage of. When this country does not live
up to its promise of fairness and opportunity for all
people, we’re all hurt. (applause) When we do
live up to those promises, all of us are better off. Back in 2008, I came to
Birmingham as a candidate for this office, and I said, “There
is nothing we cannot do if the American people
decide it’s time.” Seven years later, I still
believe there is nothing we cannot do if we
decide it is time. (applause) We’re all in this
thing together, Alabama. We’ve been through some
tough times together, but we’re coming back together. If we decide this is our time,
then together we’re going to write the next great chapter
in this country’s history. We’re going to do it not
just because I came to town, but because of the wonderful
people in this town who are already making it happen. Thank you, Alabama. (applause) God bless you. God bless the United
States of America.

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