AFSA Highlights Installment Loans Before OGR Hearing

AFSA yesterday submitted a letter to House Committee on Oversight and Government Reform Chairman Elijah Cummings (D-MD) and Ranking Member Jim Jordan (R-OH) in advance of a hearing entitled CFPB’s Role in Empowering Predatory Lenders: Examining the Proposed Repeal of the Payday Lending Rule.

The letter draws a sharp line of distinction between safe, responsible consumer credit, such as traditional installment loans, and other, more predatory products such as payday loans. It also details the factors that make installment loans radically different from other products, such as full amortization, credit bureau reporting, and the lack of balloon payments. Finally, the letter lays out the important role that installment loans play in the lives of ordinary Americans and how they allow consumers to manage and build a positive credit history.

The letter also quotes former Consumer Financial Protection Bureau Director Richard Cordray, in his testimony before the full Financial Services Committee. “[We want to] make sure there is room for responsible lending … room for installment lenders who are traditional and have responsible products…”

The hearing is set for May 16 at 2:00 p.m. ET and can be viewed on the committee’s website.