With all of the focus of the federal government in rolling back a host of regulations, there are some (many?) that will be impacted even though they were created to protect families. As an example, the Consumer Financial Protection Bureau has many different parts to it, but one of the focuses is on protecting borrowers from payday as well as other predatory lenders.
Now we are not taking a stand on whether some of the regulations being overturned by the federal government (or at least analyzed as part of the Executive Orders being signed) should in fact be done so or not. As for every person that says there are too many federal government regulations in place there is someone else that says the government can do more to protect us from Wall Street or carbon emissions or something else. We are just stating the fact that payday loan lenders will have less oversight on them if the Consumer Financial Protection Bureau policies are rolled back.
There is no argument that would be the case. As the Consumer Financial Protection Bureau (CFPB) is currently in the process of creating additional policies that would regulate all of the payday loans companies in this country. The organization also protects borrowers from a host of other loan products that are out there in the marketplace. If that process is stopped or CFPB is scaled back, then lenders will have more power to issue funds to borrowers of all backgrounds. Borrowers may only be able to turn to state government laws for payday loans to protect them.
How the Consumer Financial Protection Bureau helps Americans
To provide some details on what the Consumer Financial Protection Bureau has done in the past, please keep in mind that the government agency was created after the financial crisis in 2008. This agency was created to help protect borrowers. They look at for the working class and the “small guy”…not the corporation. Everyone from Wall Street banks to national banks, payday or auto loan companies, and others could potentially be regulated by the CFPB. Any company (or even individual) that could potentially take advantage of a borrower could fall under their oversight.
Billions of dollars have been returned to families as a result of the work done by the Consumer Financial Protection Bureau. The number of scams, illegal lending practices, illegal payday loan practices, etc. that the agency has identified has been enormous. In fact, the total dollar amount returned to families has been over $12 billion dollars over the last several years.
The billions of dollars given back to families has come from all sorts of places. There has been money from banks, credit card companies, student loan issues, and of course payday lenders. People of all backgrounds and ages have benefited. There are many stories of families of military service members being given money from CFPB as the result of shady payday loans, and seniors and the vulnerable have also benefited from the agency.
Now the reason we are reporting on the federal government potentially targeting the CFPB is so you are aware of the agency…as most Americans are not. So right now you (and all Americans) have some protections in place, and payday loan companies may not be willing to “push the envelope” since they are aware of the Consumer Financial Protection Bureau as well.
But everyone should be aware, and keep their eyes on the headlines, that if the CFPB is scaled back in any capacity, that they should be even more mindful of turning to any type of so called predatory lending company. As if something were to go wrong, the recourse available to them will be much more limited.