Today, following the Consumer Financial Protection Bureau (CFPB) release of the final rule on small dollar lending, Online Lenders Alliance CEO Mary Jackson issued the following statement:
“The Online Lenders Alliance supports the CFPB’s action addressing the previous rule’s mandatory underwriting requirements, which were overly complex and would have impacted our members’ ability to provide credit access to the Americans who need it most. Especially given our current national crisis, we need to ensure that the 90 million nonprime consumers have access to credit when they need it, and the revised rule does just that.
“To be clear: we support ‘Ability To Repay’ provisions in general, because common sense dictates that lenders cannot stay in business if consumers are unable to meet their loan obligations. No reputable lender builds a business model that doesn’t calculate a consumer’s ability to repay. We believe that any Ability to Repay rules for unsecured consumer credit should be consistent and aligned with similar laws, such as The Card Act, so as not to create disparities amongst various credit instruments or consumer types.
“We also encourage the Bureau to revisit the payments section of the rule to ensure continuity and alignment with NACHA’s rules on ACH transactions. This will protect consumers from disparities based on their credit quality or choices in financial products. In addition, the withdrawal rules for debit cards to protect consumers from incurring overdraft fees are unnecessary. Debit card structures do not allow for overdraft fees to occur which demonstrates the need to review the payments portion of the rule for accuracy.
“We have always supported well-structured regulations and our members are diligent and responsible when it comes to following the rules. We applaud the CFPB for recognizing the inefficiencies and shortcomings included in the previous version of the rule and for taking action to streamline it. Their efforts will be a critical step forward toward empowering consumers to access financial options, get on a pathway to prime credit status, and improve their financial lives.”