Press Releases

Another Example of CFPB Harming, Not Protecting, Consumers


Washington, February 11, 2016 -


WASHINGTON – Today, the Financial Institutions and Consumer Credit Subcommittee held a hearing to examine the Consumer Financial Protection Bureau’s latest attempt to restrict consumer access to financial products and services.  

The Bureau is expected to soon propose a rule that will harm consumers by taking away their right to access small dollar, short-term loans. For the underbanked in America, options are few when financial emergencies arise, and short-term, small dollar credit products are legal financial lifelines.  The Bureau seeks to regulate the small dollar credit market for the first time at the federal level.

During the hearing, Subcommittee Chairman Randy Neugebauer (R-TX) talked about the consumers he’s met who use small dollar lending.

“One couple I met took out a payday loan for the first time. The father told me he worked nights and that public transportation wasn’t reliable at 2 a.m. His family’s car was in the shop and he had to get it out to make it to work that night. He had two options—either miss a day of work and risk losing his job—or take out a short term loan to get him through this emergency,” he said.  “From the mother of five, to the disabled veteran, to the painter trying to get a truck repair—a common theme emerges in all of these stories:  ‘Please don’t take away my choice and availability to use these products.’”

Key Takeaways from the Hearing:

  • Real consumer protection puts power where it belongs:  in the hands of consumers, not Washington bureaucrats.
  • Misguided regulation that deprives consumers of access to short-term, small-dollar credit is likely to force many consumers to turn to even more expensive lenders or to do without emergency funds.
  • All 50 states have the authority to enact, repeal, or amend laws to regulate small dollar lending and the Bureau has not been able to point to any specific state as deficient in law or authority to protect its consumers.  It is presumptuous for the Bureau to proceed with a rule effectively preempting the laws of every state without first examining the Constitutional and statutory authority supporting its proposal to limit the policymaking discretion of the States and tribes. 

Topline Witness Quotes:

“The payday loan I got…was a lifeline. It enabled me to start a business. I started a janitorial business. Advance also gave me the opportunity to some work for them, cleaning the stores. Today, my business is growing. I am a minority certified business.” – consumer Robert Sherrill

“Over the years Indiana and other states have crafted meaningful regulation and consumer protections for their citizens, including small loan lending.  Indiana established consumer friendly protections for all borrowers, while providing solutions for those who need additional help. In the past year, the Consumer Financial Protection Bureau has proposed a rule creating a regulatory framework that defies the very goals my state has strived to achieve for consumers to maintain access to credit while not inadvertently driving them to unregulated, unsafe loan products. Like other states, we have worked hard to strike this balance between access to credit and protections against predatory lenders. The proposed federal regulations would throw this balance off and reduce access to short-term loans for the people in my state and others who need this type of financial assistance the most and who need it from reputable lenders.” – Indiana Attorney Greg Zoeller

“The CFPB’s refusal to work with tribes in a government -to-government manner is not consistent with the federal government’s trust responsibility to tribal governments, nor does it respect the inherent sovereignty of Indian tribes. I remain concerned that the CFPB is developing its proposed action in a vacuum without consulting with tribes to learn about the innumerable tools that we have developed to ensure that we conduct business in a manner that is fair, responsible, compliant and benefits our tribal members and the American consumer.” –Sherry Treppa, Chairperson, Habematolel Pomo of Upper Lake, a federally-recognized Indian Tribe located in rural Upper Lake, California


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