Group says bill puts jobs at risk
Employees and consumers picket against payday loan reform.
Community Financial Services Association of America says the Payday Loan Reform Act of 2009 goes too far.
The bill, HR 1214, prevents competition in the marketplace, preempts the laws in 34 states and puts tens of thousands of jobs at risk, the organization says.
President advocates responsible lending
CFSA president D. Lynn DeVault says his group has a long-standing record of advocating for responsible regulation of the payday advance industry, and he intends to continue this advocacy.
“But this bill goes too far, most notably in establishing a national fee cap for payday loans, one small segment of the short-term credit market. We’re aware of no other short-term credit product that has a national fee cap, certainly not bank and credit union NSF and overdraft protection fees or credit card late fees,” said DeVault.
One-way street
DeVault adds that the bill “does nothing to protect lenders,” and could even drive payday lenders “to extinction” in many states. For the industry, this would mean jobs and companies lost.
For consumers, this could mean a lot of different things. Without payday loans, people are left with very few choices when they have a financial emergency. They can overdraw their accounts, which is much more expensive than getting a payday loan. They could get a cash advance on a credit card, which will be exponentially more expensive if they already have a balance on that card.
For those who don’t have bank accounts or credit cards? Well, if your car breaks down, you’re walking. If your heat gets shut off, you’re freezing. If your fridge breaks, you’re going hungry.
It is getting tougher to secure a loan. I easily received a car loan last year, paid off the car, and now was recently denied another small loan. Before, there would not have been a problem. There are a lot of people worse off than I am. I feel for their situations if this avenue of lending is unavailable.
I have to agree. Legislators are trying too hard to control people’s financial freedom. The payday loan industry has done a lot more good than bad. What’s the point for them to say that we have rights to financial freedom when they continuously attempt to do things that are completely contradicting? If legislators want to control how much money we can borrow and how long we are allowed to borrow it then they might as well control everything else in our daily lives.
There is some regulation that can make sense. This act is not included. I fail to see how Congress can justify passing any legislation that is going to cost people jobs, especially right now. That’s the most irresponsible thing to do – especially after one of the biggest campaign promises from both candidates was job creation, or at least aid to that effect. Not only are more jobs being lost in the private sector, they want to legislate more unemployment into effect? What are they thinking?