Stores, jobs, pop­u­lar ser­vices at risk

Lend­ing op­er­a­tors fear feds will reg­u­late them out of busi­ness

The Washington Times Weekly - - National -

the oper­a­tions out­right.

Mr. Lynn op­er­ates his shops in three states: Florida, Ge­or­gia and Alabama. His stores of­fer a va­ri­ety of credit op­tions, in­clud­ing pay­day lend­ing, pawn and car ti­tle loans, although only pawn and car ti­tle loans are of­fered in his Ge­or­gia stores be­cause of state reg­u­la­tions. Many other small busi­nesses also of­fer a va­ri­ety of credit prod­ucts.

“It also didn’t ap­pear like the CFPB did their home­work on all of the state laws out there. We asked them sim­ple ques­tions like, ‘How would this rule in­ter­act with this state law?’ and their re­sponse was, ‘We know we need to look at the state laws, but we haven’t done that yet, but we in­tend to.’ It’s amaz­ing they’d get so far into the process as to pub­lish a rule and ad­mit they hadn’t done their home­work,” Mr. Lynn said.

In re­sponse to his meet­ing with the CFPB, Mr. Lynn and six other small-busi­ness own­ers wrote to Sen. David Vit­ter, Louisiana Repub­li­can, and Rep. Steve Chabot, Ohio Repub­li­can, who head the re­spec­tive small-busi­ness com­mit­tees in Congress, to en­list their lead­er­ship to “pre­vent the CFPB from ig­nor­ing our views, per­spec­tives, and in­put as the Bureau moves to­wards a rule-mak­ing.”

The Aug. 11 let­ter de­picted sev­eral frus­tra­tions, in­clud­ing bureau of­fi­cials’ in­abil­ity to “iden­tify fail­ings in the state reg­u­la­tory frame­work that would prompt a fed­eral over­lay of new reg­u­la­tory obli­ga­tions,” and “the lack of ap­pre­ci­a­tion the CFPB seemed to have for our cus­tomers and the re­la­tion­ship we have with them.”

The bureau de­clined to com­ment to The Times, but Mr. Cor­dray did lay out in his March speech how the rule-mak­ing process was ini­ti­ated.

“The pro­posed frame­work un­der dis­cus­sion re­flects rig­or­ous think­ing by our col­leagues at the con­sumer bureau,” Mr. Cor­dray said. “In ad­di­tion to our own ex­ten­sive re­search, we have had many dis­cus­sions with con­sumers, in­dus­try, other fed­eral agen­cies, state and lo­cal reg­u­la­tors, aca­demics, and other in­ter­ested par­ties. Our out­reach ef­forts have cov­ered both de­pos­i­tory and non­de­pos­i­tory lenders that of­fer pay­day loans, de­posit ad­vance loans, ve­hi­cle ti­tle loans, in­stall­ment loans or other sim­i­lar loans.”

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