Center for Responsible Lending warns policymakers against giving companies a “Get Out of Jail Free” card
WASHINGTON, D.C. – Today at approximately 9 a.m. ET, the Center for Responsible Lending’s (CRL) Director of Federal Advocacy, Scott Astrada, will testify before the House Financial Services Committee’s Financial Institutions and Consumer Credit Subcommittee for a hearing entitled: Examining Opportunities for Financial Markets in the Digital Era. In the hearing, the committee and its witnesses will discuss a recent U.S. Department of Treasury report on financial technology (fintech), which was released in July. Text of Astrada’s written remarks are linked here. To watch a live stream of the hearing, go to http://financialservices.house.gov/.
In advance of the hearing, CRL Director of Federal Advocacy Scott Astrada issued the following statement:
Using financial technology does not entitle a business to a ‘Get Out of Jail Free’ card. Policy makers must ensure that fintech companies follow the law, including state usury laws, and that consumers are protected from debt trap loan products.
CRL criticized the Treasury report because of its call for sweeping deregulation of nonbank lenders, including fintech firms. Specifically, the report endorses the repeal of the Consumer Financial Protection Bureau’s (CFPB) Payday Rule, the creation of special federal bank charters for fintech firms, regulatory “sandboxes” that exempt startups from certain consumer protection laws, and federal preemption of state consumer protection laws. These recommendations fly in the face of a poll released earlier this summer showing the majority of voters in all political camps want strong consumer protections for payday loans and other financial products.
For more information, or to arrange an interview with a CRL spokesperson on this issue, please contact Matthew Kravitz at firstname.lastname@example.org or 202-349-1859.