Local View:
Rule would hurt small businesses, borrowers.
Last summer, the Consumer Financial Protection Bureau proposed a rule that would essentially eliminate the short-term lending industry, take away credit options from millions of consumers, and force my family’s small business to close its doors. My father founded LendingBear more than 20 years ago to help hardworking Floridians during trying financial times through payday loans and other short-term lending solutions.
The CFPB was required by law to bring together a number of smallbusiness owners to hear how the payday lending rule would affect small businesses. I was honored to be selected to participate in these discussions, but from the start, it was clear that the CFPB didn’t care about my perspective.
The bureau estimated that the proposed rule would decrease small-business revenue by more than 70 percent. When I saw that number spelled out, I realized that the proposed rule is meant to put companies like mine out of business, not to protect consumers.
Without evidence, the bureau decided that payday loans are harmful to consumers. Instead of talking to people who use payday loans to find out why they make that decision, the CFPB let activists with their own agendas write the rule.
During one small-business panel discussion, I asked CFPB officials if the bureau had looked at existing state laws to fully understand how payday loans are regulated. The answer was no. My home state of Florida is one of more than 30 states that has payday-lending laws with strong consumer protections that could serve as a model for the country. But in typical Washington fashion, CFPB bureaucrats think they have all the answers. They made no effort to learn from state policymakers who have spent decades creating payday-lending regulations that protect consumers and make sure they have fair access to credit. Washington’s efforts to kill the short-term lending industry extend beyond the CFPB. Since 2013, a federal campaign known as Operation Choke Point has pressured banks to disqualify payday lenders and other legitimate industries from critical banking services. As a result, my company lost our two largest banking relationships.
My customers are not happy about what the CFPB is doing. They are average Americans — teachers, police officers, salespeople — who sometimes struggle to make ends meet. They use payday loans for things like unexpected medical expenses and home and auto repairs.
Taking away their access to payday loans wouldn’t magically solve their problems. Instead, it would force them to turn to dangerous unregulated lenders or more expensive forms of credit, or suffer the consequences of unpaid bills.
But the CFPB doesn’t seem to care about small-business owners or understand consumers. The bureau’s end goal has been to eliminate regulated payday loans. If the bureau officials had listened for even a moment to small-business owners or satisfied customers who use our service, they would know that eliminating access to shortterm credit would hurt the people they say they are trying to help.