The Online Lenders Alliance (OLA) has offered input concerning the Consumer Financial Protection Bureau’s (CFPB) intent to revisit portions of the Small Dollar Rule.
“We support a well-regulated market, based on fact and industry reality, and we support CFPB and other regulators efforts to drive out bad actors and protect consumers,” Mary Jackson, OLA CEO said in an organization statement. “However, the recently published CFPB proposals to fix the problem with its previously issued small dollar lending rule is about more than just payday loans. It is about the fintech industry’s ability to help provide access to credit for the millions of American borrowers who are often locked out of credit from traditional financial institutions.”
Jackson noted the OLA’s membership includes not only lenders but also alternative credit bureaus, lead generators, and software developers, which she said encompasses the entire fintech community.
“We believe the rule as written, and the proposal, still reinforce the institutional bias in our banking systems against non-prime rated consumers – setting different standards for them in applying for loans and making payments, in particular, the payment requirements are unique and different than accepted industry practices promoted and enforced by NACHA and other managers of payment systems,” Jackson said. “This rule uses data collected in a different era before changes were made to NACHA standards strengthening the performance standards and penalties. It’s time to take another look at the payments portion of the rule in light of those changes.”