Courtesy of Trump National Doral Miami
Payday lending business has been going through a difficult time recently due to all the more restrictive steps taken by both state and federal regulatory bodies. The annual conference of the Community Financial Services Association of America is to bring the discussion of all the problems and perspectives of the industry to the new level in Miami in April.
These high-interest loans have always been both a matter of concern and an object of heated discussions at all levels. They are considered predatory for being excessively expensive, and yet, they represent the only available credit opportunity for many low-income individuals with bad credit and limited access to traditional loan products.
One of the major issues to be discussed at the CFSAA conference is definitely the finalized rule of the Consumer Financial Protection Bureau that is planned to go into full effect in a two-year period. This rule was not welcome by the CFSAA as it obliges all lenders to check creditworthiness of their customers, which, basically, deprives the industry both of its sense, efficiency and profit.
Payday loan industry supporters see the CFPB’s rule as misguided, indeed. The opposition has a long history as the CFPB was founded in 2008 right after the financial crisis and was meant to bring order to the industry. Yet, lenders themselves and their advocating groups only see its efforts as bothersome and life-complicating when it comes to such small cash short-term lending.
It is curious that the the CFSAA conference is to take place at Donald Trump’s Miami golf resort as the bureau was not an idea of Republicans, quite the opposite. The latter have been trying to interfere with its work since the elections (e.g. a bill proposed by Ted Cruz aiming to eliminate the CFPB), and now it is quite possible that the President and the Congress won’t make the rule happen. However, the CFSAA did not make any comments on that matter so far.
Surely, the coming conference is likely to reveal many interesting alternations. One of the most talked-of is the possibility of the CFPB director Richard Cordray being dismissed and replaced by a more industry-friendly executive. Taking into the fact that payday lenders and their advocates are not inclined to accept the the CFPB rule easily, we are definitely to wait more developments in the sector in the nearest future.