The Consumer Financial Protection Bureau’s reach is spreading and threatening to choke consumers’ access to small-dollar loans, ABA EVP Wayne Abernathy said in an opinion piece published in The Washington Times last week.
“Much like planting kudzu in a rose garden, the unchecked spread of the consumer bureau threatens to smother when it tries to protect,” Abernathy wrote. He noted the bureau’s reach to auto finance companies, telecom companies, colleges and community banks, which are exempt from CFPB exams yet subject to bureau rules.
Abernathy expressed particular concern for CFPB efforts to regulate small-dollar and payday loans and debit card overdraft services. “The need … to use credit to manage the timing of income with expenditures borders on the universal,” he said. “There are social as well as economic reasons to serve this market. What we need are approaches that cultivate small-dollar lending, not choke it off.”
