Advance America's statement on the Consumer Financial Protection Bureau's final rule governing short-term, small-dollar loans.
SPARTANBURG, S.C., October 5, 2017: In response to the release of the Consumer Financial Protection Bureau's (CFPB) final rule governing short-term, small-dollar loans, Jamie Fulmer, senior vice president of public affairs, issued the following statement, providing Advance America's initial response to a complex, 1,690-page rule governing loans typically less than $400:
"In its new rule governing short-term, small-dollar loans, the CFPB strips away access to regulated credit for millions of Americans, abandoning them to borrow from unregulated lenders or costlier bank programs. Narrowed from the draft rule proposed last year, this final rule flies in the face of the CFPB's stated goals of leveling the financial services playing field and preserving access to credit, instead codifying the very flaws that resulted in widespread opposition from stakeholders on both sides of the issue during the public comment period.
"Most concerning, this rule completely disregards the concerns and needs of actual borrowers, who value this credit option and told the CFPB as much in the record 1.4 million comments submitted. Rather, it is the predetermined outcome of a contrived and deeply flawed rulemaking process, dictated by personal biases and politics and the outsized influence of ideologues and activists, to eviscerate a regulated industry and disenfranchise millions of American consumers.
"The Bureau engaged our industry's fiercest critics - masquerading as consumer advocates - to write and revise the rule before, during and after the public comment period. It ignored calls to address the growing number of unregulated operators and its pledge to follow its own complaint data, which show that short-term, 'payday' loans account for less than two percent of all complaints.
"The rule specifically, unaccountably exempts most banks and credit unions from the major provisions of the rule - even when they offer identical products. This unsubstantiated decision to regulate providers instead of products demonstrates political expediency and the Bureau's transparent ideological bias against non-bank lenders.
"Despite statutory requirements and rebukes from the Obama Administration's Small Business Administration Office of Advocacy, the CFPB failed to adequately consider the significant impact this rule will have on small lenders and their customers. It also neglected to ever address the rule's preemption of existing, effective state regulations and consumer protections, even after admonishment from 18 states' attorneys general.
"With this rule, the CFPB has abdicated its central mission as an independent, non-partisan government agency to protect and empower consumers and create a level playing field, rushing the rulemaking as its director reportedly plans his campaign for governor of Ohio. While the Bureau aggressively pursued these restrictive, arbitrary regulations on a popular, regulated financial service, hundreds of millions of Americans' personal and financial data were compromised and millions of others were the victims of unauthorized bank account openings and bill payments, all under the CFPB's watch.
"President Trump and Congress must intercede, to protect American consumers and their right to access credit in the face of a Bureau committed to doing so in name only."
About Advance America Cash Advance
Founded in 1997, Advance America, Cash Advance Centers, Inc. is the country's leading provider of non-bank cash advance services, with approximately 2,400 centers across the country. The Company is a founding member of the Community Financial Services Association of America (CFSA), whose mission is to promote laws that provide substantive consumer protections and to encourage responsible industry practices. Advance America is a wholly owned subsidiary of Grupo Elektra, one of the largest Latin American providers of banking services, consumer finance and specialty retailing. Please visit www.AdvanceAmerica.net for more information.