Predatory loans for puppies must be stopped, say consumer and animal welfare advocates Consumers’ Federation of America
Washington, DC – Ahead of National Love Your Pet Day on February 20, the Stop the Debt Trap Coalition is joining with animal welfare advocates to launch a campaign to stop TAB Bank from making predatory puppy loans , many of which are used to buy puppies. puppy mills. At pet stores across the country, Transportation Alliance Bank (TAB Bank) is helping predatory lender EasyPay Finance evade state interest rate laws and provide pet loans at 130% to 189% APR (annual percentage rate) – illegal rates in most states for EasyPay and other non-bank lenders. Consumer and animal welfare advocates are calling on TAB Bank to stop helping EasyPay defraud consumers with these loans and on the Federal Deposit Insurance Corporation (FDIC) to stop TAB Bank from facilitating this usury. The campaign includes:
- A new report describing how TAB Bank helps EasyPay provide predatory puppy loans;
- A Feb. 15 rally with the Utah Humane Society at the Salt Lake City State House to highlight TAB Bank’s role in funding predatory puppy loans;
- A social media storm on February 17 – with #PredatoryPuppyLoans, #PredatoryTABbank and #LoveYourPetDay;
- An effort to collect stories people affected by predatory puppy loans;
- A focus on how predatory financing promotes the sale of puppy mill dogs;
- A petition urge the FDIC to stop TAB Bank and other banks from helping nonbank lenders disguise their loans as bank loans exempt from state interest rate limits;
- Work to expand support for the Fair Credit Act for Veterans and Consumers, which would set a national interest rate cap of 36%;
- And more to come…
EasyPay offers financing for purchases at pet stores, auto mechanics, furniture stores and other retailers at rates ranging from 130% to 189% APR. In 32 states where those rates are illegal, EasyPay launders its loans through Utah-headquartered TAB Bank to disguise the loans as bank loans exempt from state rate caps. This is a practice often referred to as a “rent-a-bank” program. In states that allow these high rates, EasyPay directly extends funding. To see which stores offer EasyPay loans, go to https://findastore.easypayfinance.com/.
Hundreds of consumers have filed complaints against EasyPay (owned by Duvera Billing Services) with the Consumer Financial Protection Bureau (CFPB), Better Business Bureauand Scam report. They describe: exorbitant interest rates with payments mostly going to interest; high rates even for military service members; misleading interest-free promotions; debt collectors stalk people for money; and abuse of credit reports. For example:
- A consumer in New Jersey went to a pet store “hoping to buy a cocker spaniel…I found out I was being charged 151.97%, five times the legal limit of 30% that could be charged in the New Jersey”.
- A military consumer in Florida described “the huge interest rate” of 130% APR for a dog.
- Another person complained that a pet store wouldn’t take back a sick dog and ended up dying: “I had no choice [but] keep paying them [so] so as not to ruin my credit history, while trying to save a dog that pays thousands [of] dollars in vet bills…. It tore my family apart losing the dog. My children were particularly devastated…. I only borrowed [$2200.00] and this is the report that I owe [$5500.00] on my credit file because of the interest.
These and other stories are documented in a new report on Loans for predatory puppies by TAB Bank and EasyPay Finance.
“The harmful ‘rent-a-bark’ model is being used by predatory payday and installment lenders to provide loans at triple-digit interest rates to those looking to bring back puppies and other pets. at home. TAB Bank must be stopped from acting as a front for these loans which are illegal throughout the country,” said Rachel Gittleman, head of financial services outreach at the Consumer Federation of America.
“TAB Bank is abusing its banking charter by putting on a facade of predatory lending that bleeds consumers dry”, said Nadine Chabrier, policy and litigation lawyer at the Center for Responsible Lending. “Responsible merchants should stop peddling predatory EasyPay loans and the FDIC should end TAB Bank’s involvement in this scheme.”
“Pushing funded purchases is just another way puppy mills and their pet outlets are selling puppies for thousands of dollars to unsuspecting consumers, many of whom end up with high interest rates. extremely high interest and hidden fees that they often cannot afford. said John Goodwin, senior director of the Stop Puppy Mills campaign for the Humane Society of the United States.. “Some pet stores have reported that 80% of the puppies they sell are financed, indicating that these predatory loans are a key part of the pipeline from puppy mill to pet store.”
“TAB Bank’s partnership with EasyPay Finance promotes farm financing of puppies from inhumane, high-volume dog-breeding operations that ignore the needs of puppies, including proper veterinary care and early socialization” , said Rachel Heatley, advocacy director for the Utah Humane Society.
“The FDIC must end the romance between TAB Bank and EasyPay Finance”, said Lauren Saunders, associate director of the National Consumer Law Center. “TAB Bank and EasyPay’s bank leasing relationship enables 189% puppy loans of dubious legality – well beyond many state interest rate caps – dramatically increasing the cost of ‘a pet.”
“The FDIC should be a watchdog that pursues banks, like TAB Bank, that use bank lease programs. Under the previous leadership, the agency didn’t even bark, let alone bite. We hope the new leadership will put an end to these predatory puppy loans that trap people in endless debt,” Candace Archer told Americans for Financial Reform.
“The FDIC needs to put up a fence between TAB Bank – or any bank – and predatory puppy lenders,” said Adam Rust, Senior Policy Advisor, National Community Reinvestment Coalition. “With new leadership at the FDIC, it’s time to close those gaps.”
“It’s time for the FDIC to put a leash on TAB Bank’s predatory puppy lending, which is having fun at the expense of consumers and their furry friends,” said Mike Litt, US PIRG Consumer Campaign Director.
“I am a dog dad. My dogs are my family,” said Brent Adams, senior vice president of the Woodstock Institute. “TAB Bank and EasyPay know that the love of an animal will drive many people into one of their predatory loans. This is financial abuse of the worst kind.
“A triple-digit interest rate loan is no less predatory when laundered through a bank. TAB Bank is only making a bad situation worse by facilitating high cost loans that promote the use of abusive puppy mills,” said Jeremy Funk, rescue dog owner and spokesperson for Accountable.US. “Federal regulators should crack down on this intersection of exploitative behavior that harms consumers and animals.”
Earlier this month, more than a dozen advocacy organizations have called for new FDIC leadership prevent banks from acting as a front for predatory lenders through these schemes.
Puppy mill background
According to the Humane Society of the United States (HSUS), a puppy mill is an inhumane, high-volume dog-breeding facility that produces puppies for profit, ignoring the needs of the puppies and their parents. Windmill puppies are often sick and unsocialized. Breeding dogs are often confined to small, dirty cages their entire lives, repeatedly bred until their bodies are exhausted. Puppy mills hide this cruelty by selling through third parties like pet stores. Pet stores often offer loan options to their customers with bogus promises of low interest rates only to hand them over to third party lenders like EasyPay. The HSUS recommends that those looking to add a new pet to their family avoid pet stores and instead adopt from a shelter or rescue or seek out a responsible breeder who only sells directly to the public.
For more information, including B-roll of puppy mills or pet stores, or to interview an HSUS representative, please contact Kirsten Peek at [email protected]
Contact: Rachel Gittleman, 609-571-5953