{"id":25507,"date":"2020-02-04T15:37:19","date_gmt":"2020-02-04T20:37:19","guid":{"rendered":"http:\/\/cfif.org\/v\/freedom_line_blog\/?p=25507"},"modified":"2020-02-05T11:17:50","modified_gmt":"2020-02-05T16:17:50","slug":"congressional-proposals-targeting-consumer-finance-lending-will-harm-lower-income-americans-they-claim-to-protect","status":"publish","type":"post","link":"https:\/\/cfif.org\/v\/freedom_line_blog\/25507\/congressional-proposals-targeting-consumer-finance-lending-will-harm-lower-income-americans-they-claim-to-protect\/","title":{"rendered":"Congressional Proposals Targeting Consumer Finance Lending Will Harm Lower-Income Americans They Claim to Protect"},"content":{"rendered":"

This week, the House Financial Services Committee – headed by far-left Representative Maxine Waters (D – California) – holds a hearing<\/a> on the issue of loan services to struggling American consumers, including legislation that would make matters worse in the name of claiming to help them, such as the so-called “Veterans and Consumers Fair Credit Act.”<\/p>\n

On a superficial level, federal legislation regulating lending services and capping repayment rates may seem helpful to Americans struggling paycheck-to-paycheck.\u00a0 But the real-world impact only eliminates a source of reliable, legal short-term loans to get them through temporary emergencies.<\/p>\n

According to the Federal Reserve System’s Board of Governors in a study on the economic wellbeing of U.S. households<\/a> in 2018, nearly 40% of American families don’t possess sufficient savings to cover even a $400 emergency expense. Incredibly, 51% of military service members<\/a> live paycheck-to-paycheck.<\/p>\n

In such circumstances, credit cards aren’t always a viable option for them, and a more traditional bank loan isn’t an option due to the small amount needed.\u00a0 Whereas higher-income Americans with stronger credit history are able to borrow from banks, use assets they possess as leverage or use their savings amounts, those with lower credit scores and without sufficient savings cannot.\u00a0 In fact according to the Fair Isaac Corporation<\/a>, some 46% of consumers possess credit scores below 700, meaning that traditional bank loans aren’t possible for them.<\/p>\n

In such circumstances, struggling Americans can access the money they need for the short-term via consumer finance loans.\u00a0 But under the sorts of legislation contemplated by the House and pushed by leftists who think they know better, consumer finance lending will become less available.<\/p>\n

And the unintended consequence will be more people seeking out illegal loansharks, suffering overdrafts, or simply being unable to cover their temporary costs.\u00a0 As the World Bank found<\/a>, such regulatory and legislative proposals lead to “increases in non-interest fees and commissions; reduced price transparency; lower number of institutions and reduced branch density; and adverse impacts on bank profitability, in addition to the lack of access for smaller and riskier borrowers.”<\/p>\n

That’s not fair, nor does it help the people that such legislation claims to protect.\u00a0 For that reason, all of our elected leaders should reject this chimerical effort, which would only serve to make consumer finance lending more difficult and more expensive.<\/p>\n","protected":false},"excerpt":{"rendered":"

This week, the House Financial Services Committee – headed by far-left Representative Maxine Waters (D – California) – holds a hearing on the issue of loan services to struggling American consumers, including legislation that would make matters worse in the name of claiming to help them, such as the so-called “Veterans and Consumers Fair Credit […]<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[5098,5097],"class_list":["post-25507","post","type-post","status-publish","format-standard","hentry","category-posts","tag-consumer-finance-lending","tag-lending"],"_links":{"self":[{"href":"https:\/\/cfif.org\/v\/freedom_line_blog\/wp-json\/wp\/v2\/posts\/25507","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/cfif.org\/v\/freedom_line_blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cfif.org\/v\/freedom_line_blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cfif.org\/v\/freedom_line_blog\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/cfif.org\/v\/freedom_line_blog\/wp-json\/wp\/v2\/comments?post=25507"}],"version-history":[{"count":4,"href":"https:\/\/cfif.org\/v\/freedom_line_blog\/wp-json\/wp\/v2\/posts\/25507\/revisions"}],"predecessor-version":[{"id":25511,"href":"https:\/\/cfif.org\/v\/freedom_line_blog\/wp-json\/wp\/v2\/posts\/25507\/revisions\/25511"}],"wp:attachment":[{"href":"https:\/\/cfif.org\/v\/freedom_line_blog\/wp-json\/wp\/v2\/media?parent=25507"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cfif.org\/v\/freedom_line_blog\/wp-json\/wp\/v2\/categories?post=25507"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cfif.org\/v\/freedom_line_blog\/wp-json\/wp\/v2\/tags?post=25507"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}