By Kellan Howell - The Washington Times - Saturday, August 1, 2015
A growing number of congressional Democrats are challenging the new financial oversight agency championed by President Obama and Massachusetts Sen. Elizabeth Warren, cautioning against its latest proposed rules for payday lenders that could hurt consumers.
The U.S. Consumer Financial Protection Bureau, the newest federal agency, proposed new rules this spring that seek to regulate payday lenders frequently used for banking services by minorities, the poor and the elderly who need short-term emergency loans.
Mr. Obama and Ms. Warren have accused the payday lending agency of engaging in predatory lending and seek to impose sweeping regulations across all lenders.
But a growing number of Democrats, including Florida Rep. Debbie Wasserman Shultz who heads the Democratic National Committee, are challenging the new rules as a bad example of a “one-size-fits-all” policy that will limit consumers’ banking choices.
In a bipartisan letter sent to the agency on Saturday, a handful of lawmakers included Ms. Schultz, Florida Reps. Alcee Hastins and Corrine Brown, and Calif. Reps. Jim Costa and Tony Cardenas.
“We are concerned that individuals who rely on the availability of short-term and small-dollar loans to make ends meet will be forced to turn to more expensive alternatives potentially resulting in a phenomenon that is hardly the financial protection that theCFPB seeks to accomplish through this regulatory scheme,” the 28 lawmakers, including 16 democrats and 12 Republicans wrote in the letter.
The lawmakers implored CFPB to work together with industry stakeholders to ensure a transparent process and to conduct field trials in specific markets to test how the new rules will work in practice.
“Indeed the best interests of the consumer can only be advanced when we ensure that lending practices are both fair and transparent, while also making certain that Americans most in need are not further restricted in their credit options,” the lawmakers wrote. “Any rule that unnecessarily restricts access to credit should be reconsidered.”