ARLINGTON, Va. (January 10, 2025)—After the Consumer Financial Protection Bureau (CFPB) signaled in a recent letter its intent to develop a proposed rule to define larger participants in the market for personal loans, in response to a petition by the Center for Responsible Lending (CRL) and Consumer Bankers Association (CBA), Online Lenders Alliance Chief Executive Officer Andrew Duke issued the following statement:
“It is ridiculous that the CFPB is acting now, more than two years after receiving the CRL/CBA petition for this rulemaking and less than two weeks before the expected change in the Bureau’s leadership and direction. As we noted when it was submitted in 2022, the petition’s portrayal of the non-bank consumer lending market was grossly distorted, and the CFPB was wise to shelve it for the past two years. It’s regrettable that they’re now hastily attempting to revive it on their way out the door.
“While the CRL/CBA petition insinuates that CFPB supervision of nonbank lenders would result in better outcomes for credit-seeking consumers, it fails to acknowledge the extensive regulatory regime these lenders comply with every day and the fact that the vast majority of banks in the U.S. are also not supervised by the CFPB. Furthermore, data shows that the nonbank loans the CFPB is targeting with this action are in increasingly high demand as consumers see these products as the best available option to meet their needs. In fact, OLA data shows that a considerable number of borrowers are securing small dollar loans from nonbank online lenders rather than their primary bank, even when their bank offers a small dollar product.
“With the leadership of the CFPB set to change in roughly ten days, we hope that the Bureau’s new leadership will reconsider this misguided notion.”
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