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
U.S. Consumer Confidence Jumps as Current Views Hit 18-Year High
U.S. consumer confidence improved in February, topping all forecasts and snapping a three-month losing streak,…
Young adults turn to personal loans for debt, wedding and moving expenses
Kyle Littleton, 26, wanted to get rid of nearly $4,500 in credit card debt. The…
Boomerang Buyers: More People Who Lost Homes During Housing Crisis Are Buying Again
More people who lost homes to foreclosure or short sale during the housing crisis may…
Why women notoriously have more credit card debt than men
It’s no surprise that Americans love their credit cards. So much so, that outstanding credit…
Free Personal Finance Classes Can Help You Avoid Expensive Mistakes
The American Financial Services Association (AFSA) Education Foundation has unveiled its updated MoneySKILL financial literacy…
Most Consumers Overestimate What It Takes to Get a Mortgage
A recent Fannie Mae survey finds most consumers believe that obtaining a mortgage requires a…