Stores, jobs, popular services at risk
Lending operators fear feds will regulate them out of business
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.”