CFPB Must Prioritize People Over Payday Lenders

The American Banker
CFPB Must Prioritize People Over Payday Lenders
By Rev. Tony Pierce, co-pastor of Heaven's View Christian Fellowship in Peoria, Ill., and board president of Illinois People's Action, a member of National People's Action

Dennis Shaul's recent op-ed inAmerican Banker argues that the Consumer Financial Protection Bureau's proposed payday lending rules are too harsh. He also insists that the voices of payday lenders have been underrepresented in discussions about forthcoming regulations. Both assertions are inaccurate and off the mark.

The CFPB's proposed outline for small-dollar lending rules is not perfect. There are too many loopholes that might allow payday lenders to get around the ability-to-pay standard and not enough protections against abusive and deceptive lending practices. But they do offer common-sense protections that would help prevent the worst consumer abuses. While Shaul claims that the effect of the rules on the short-term credit market would be "catastrophic," in reality these rules would only be catastrophic to lenders whose business model is dependent on trapping consumers in an endless cycle of debt and charging usurious interest rates.

[Read More at The American Banker]