In considering reforms to the small-dollar loan industry, lawmakers must tread carefully to avoid limiting credit access for the most vulnerable populations, writes the American Consumer Institute’s Liam Sigaud. The Consumer Financial Protection Bureau recently announced that it will re-evaluate its proposed rule requiring lenders to certify that the recipient of a loan is able to repay it. This underwriting provision was slated for implementation later this year. Sigaud argues that minimal regulation and vigorous competition would help consumers more than government regulations that favor large, incumbent lenders over promising startups. He adds that the majority of consumers understand the terms and are able to pay back their loans. While continuing to educate consumers is important, Sigaud concludes, “millions of Americans would be worse off without access to small-dollar loans.”
Similar Posts
Consumers Lack Confidence in the Car Buying Process, Study Finds
As car buyers start their search for year-end deals, Capital One Auto Finance has released a study…
Loans Get Cheaper for Some
Borrowing costs have trended lower for some U.S. consumers in recent months, especially home buyers….
One Simple Way to Reduce Your Risk of Late Payments on Personal Loans
According to a study of more than 400,000 Sallie Mae clients, including borrowers’ credit scores…
Senate Looks to Fix ‘Broken’ Credit Reporting System
The Senate Committee on Banking, Housing and Urban Affairs held a hearing yesterday on the…
How Does Buy Now, Pay Later Affect Customers’ Credit?
This paper explores the relationship between consumers’ use of buy now, pay later (BNPL) and…
FHA is making more mortgages available to applicants with risky debt profiles
Is it easier today for home buyers with a high debt ratio and subpar credit…