Luis Gutierrez selected for chairman position
Luis V. Gutierrez
U.S. Congressman Luis V. Gutierrez has been chosen to head the Financial Services Subcommittee on Financial Institutions and Consumer Credit, and payday loans are high on his agenda. The Democratic Caucus selected the Democrat from Illinois, and the Full Committee will vote on his appointment on Tuesday.
Gutierrez will be a key player in the implementation of any bailout plans involving financial institutions, including distribution of the $350 billion in remaining TARP funds. The subcommittee he will likely oversee has jurisdiction over chartering, merger, acquisition and consolidation of financial institutions.
Pumping payday loan hype
When the senator is officially assigned to his new post, he plans to turn his efforts toward regulating payday loans.
“I plan to devote specific attention to payday lending reform, ensuring that consumers do not get caught in a debt trap at the hands of unscrupulous and virtually unregulated lenders,” Gutierrez said.
We can only hope he does his homework before he dives into regulating payday loans. If he follows the example of states, such as Ohio, who have put interest rate caps on payday loans, the results could be devastating. Since Ohio passed laws regulating interest rates on payday loans, 6,000 people who worked in the payday lending industry have lost their jobs. In many cases, interest rate caps drive payday lenders out of business and put hard working Americans out of jobs.
Job description
Besides being in charge of financial institutions, Gutierrez’s committee also oversees all matters pertaining to consumer credit. There has been much clamoring about regulating credit cards and other forms of consumer lending, and this committee will be in charge of those regulations as well as enforcing the regulations already in place.
The committee is also in charge of the Truth in Lending Act and the Consumer Credit Protection Act. It also oversees fair credit reporting and the use of credit information by credit bureaus and creditors, consumer access to financial services, as well as the overall safety and soundness of the banking system.
The man behind the job title
Gutierrez has served eight terms in the U.S. House of Representatives. In 1992 he was the first Latino to be elected to Congress from the Midwest. He has devoted a lot of time and effort to immigration issues.
Gutierrez currently serves on the Financial Services Subcommittee chairing the Domestic and International Monetary Policy, Trade and Technology panel as well as sitting on the Immigration, Citizenship, Refugees, Border Security and International Law Subcommittee.
Let’s hope that is his new quest to protect consumers and small businesses he doesn’t forget that interest caps on payday loans drive small businesses to bankruptcy and cause working consumers to lose their jobs.
Why are “payday loans” so worried about regulation from the government? Hmmmm. Could it be that maybe people are really tired of up to 450% interest on a small loan? Hmmmm. Sure there are high risk borrowers that can’t obtain financing from conventional sources – but these people get buried by payday loan companies and don’t pay the loan back anyway. And the few that do rarely come back for repeat business. I think to say payday loans will go out of business and cause thousands to lose their jobs is just plain hogwash! What about all the people that have to file for bankruptcy protection that end up listing MULTIPLE payday/cash advance loans on their petition? What about those consumers who get their wages assigned and can’t put food on the table because of having to pay back $1400 for an original $325 loan? You can spin your tale anyway you want but the bottom line is: interest caps ARE needed and they ARE gonna be put into effect… and it’s about time!
“…interest rate caps drive payday lenders out of business.”
Awesome! That’s a good thing. The less places people can borrow money to buy beer, cigarettes, and lottery tickets that they cannot afford, the better off society will be.
Good for Gutierrez.
Cash Queen: You should stop promoting the irresponsible use of debt! Or else change your name to “Let Me Stick You In a Cycle of Debt” Queen.
I absolutely agree with Mr. Gutierrez. Consumers should not be victimized by depraved, unregulated lenders, especially in the midst of their dire needs. No one should be taken advantage of because of their vulnerable condition. However, I do know that placing strict restrictions on payday lenders, like planting interest rate caps on payday loans, will only make things worst in regards to the economy and the unemployment situation. All payday lenders should conduct business in a discreet and proper manner and I believe they should be regularly checked on like any other type of business.
most consumers are responsible when it comes to payday loans. they use a licensed business that is regulated by the state dept of financial institutions. banks overdraft fees approach 39.00 regardless of the amount of check. ie 10.00 nsf cost 39.00 fee. sometimes multiple nsf’s. the average 100.00 payday loan fee is 15.00 for up to 30 days