WHY ARE WE HERE?

There seems to be broad consensus among industry and consumer groups:

1. that there is a real need for small dollar credit; it is already acute and it is growing even as borrowing options in the marketplace are disappearing,
2. that structure matters, and
3. that the traditional installment loan provides the best and safest structure for the consumer.

As Jennifer Tescher of CFSI wrote in the American Banker recently, “small-dollar credit must be high-quality. It must be marketed transparently. It must be affordable and structured to support repayment, with amortization periods that extend beyond a single pay period, and repayment must be reported to the credit bureaus.” We agree.

Advocates have consistently told us that we will not be a target of the new Bureau, at least not in the immediate future. What are we concerned about, then?

The CFPB has been created in such a way as to have rulemaking, supervision and independent prosecution abilities that are unprecedented in US Government. Congress has apparently little ability to restrain it through the Appropriations process, and the Director once confirmed cannot be fired until their term is up. It can act without regard to popular pressure or the democratic process. Rarely has so much power been ceded by Congress to an unelected agency or official.

If a mistake is made, it could have a devastating effect on the supply of credit, on which our economy so delicately rests. Broadly written rules or opinions have the potential to wreak havoc on unintended victims. It matters little that we were not being deliberately targeted if we become “collateral damage.”

How will this Legislation effect the Installment Loan Industry?

The installment loan industry serves people who are trying to meet both day-to-day and unexpected expenses. Most customers are employed, but like many Americans, have little savings. Many have damaged credit histories, which further inhibits access to credit even in the best economy. Because commercial banks rarely offer small dollar (under $2,000) loans to their existing depositors much less to non-depositors the options for the installment loan customer are few.

The CFPB may regulate consumers credit cards, debit cards, consumer loans, installment loans, payday loans, credit reporting agencies, debt collection, stored-value cards and even investment advisory and financial advisory services, to name only a few.

Handing over consumer protection and enforcement powers to a new agency that does not understand the business side of banking will be burdensome for lenders and add extra layers of bureaucracy and nightmarish legal liabilities. The creation of a new federal agency, in addition to the state agencies we currently comply with, will restrict what installment lenders can charge for our services and could well force us out of business altogether.

How will a Consumer Financial Protection Agency affect installment loan employees and customers?

H.R. 3126 has created a new regulator appointed by President Obama. It has the power to strip from consumers their freedom of choice and restrict their credit opportunities in the midst of a financial recession — all in the name of “consumer protection.” For example, agency bureaucrats can now tell our customers how many loans they may take and how they will borrow money. They now also have the authority to assess fees on lenders to pay for the cost of the new agency, thus increasing the cost to the consumer. Rules that regulate an already working industry to streamline the regulatory system are unnecessary. Finally, this agency will give the government control over compensation standards for employees of financial services institutions and could eliminate arbitration clauses.

What can we do to help?

Get involved! Write your Representative and Senators in Washington. Meet with them when they are home. They want and need to hear from you before they vote on legislation. You may also contact your state representatives and ask them to help familiarize the federal legislators from your state about the importance of this legislation to their common constituent.

Tell your customers about this legislation and encourage them to write as well. In this packet and on our website, you will find a letter for customers to readily communicate with their legislators.

Let us know of your interest and what you’re doing. If you want to arrange a meeting with your Representative and Senators, contact us and we will help you arrange meetings with your legislators when they are home.

Click here to take action

Legislative Updates

The NILA Membership Legislative Update on CFPB is available here.

If you would like to be more involved and help stop this legislation from passing, please fill out the form below and a staff member will contact you within five business days.

If you have questions or trouble accessing this website, please feel free to use this contact form also.

11/14/11 MEDIA RELEASE: High-APR Payday-Style Loans Launched by Nonprofit Community Development Credit Unions

10/24/11 MEDIA RELEASE: North Carolina Cities Lead the Pack in Highest Credit Card Debt Ratio

08/19/11 MEDIA RELEASE: 51% of Traditional NC Consumer Finance Companies Report 2010 Losses

08/17/11 MEDIA RELEASE: North Carolina Commissioner of Banks Proves Consumer Advocates Wrong

07/24/11 MEDIA RELEASE: Kent Younce Exposes Identity Theft of Consumer Finance Industry

07/21/11 MEDIA RELEASE: Expert Opposes Caps and Encourages Modernizing NC Consumer Finance Act

07/19/11 MEDIA RELEASE: Identity Theft Solution for the Consumer Installment Loan Industry

06/02/11 MEDIA RELEASE: HB 810: North Carolina Legislators’ Consumer Installment Lending Relief

06/01/11 MEDIA RELEASE: HB 810 Helps Tight Economy and North Carolina Business and Consumers

05/31/11 MEDIA RELEASE: NC HB 810 Gains Approval to Keep Responsible Lending Available in North Carolina

05/29/11 MEDIA RELEASE: North Carolina Votes YES to HB810

05/24/11 MEDIA RELEASE: HB810 Helps Stop Predatory and Offshore Lending for North Carolinians

05/06/11 MEDIA RELEASE: Activists Inflate North Carolina Consumer Loan Costs Opposing NC HB810

04/07/11 MEDIA RELEASE: Legislation Protects North Carolina Consumer Access to Small Dollar Loans

04/03/11 MEDIA RELEASE: North Carolina Consumer Installment Loan Industry Announces Important 4/5/11 Educational Forum. Featuring Guest Speaker, Dr. Harold A. Black

03/28/11 MEDIA RELEASE: Safe and Affordable Personal Consumer Installment Loans are Back In Vogue

02/23/11 MEDIA RELEASE: Banking Commissioner’s Study Just Released on Modernizing North Carolina’s Consumer Finance Act

01/014/11 MEDIA RELEASE: Personal Loan Industry of North Carolina Maintains High Ratings

01/09/11 MEDIA RELEASE: The Importance of Protecting Consumers’ Continuing Access to Safe, Responsible, and Disciplined Small-dollar Installment Loans in North Carolina

 

North Carolina HB810 Importance Explained by Chris McKinley

 

 

 

 

 

 

“I Got Control Over My Finances and My Life”
Priscilla’s Personal Loan Success Story

 

 

 

 

 

 

“When You Need A Friend”
Emergency Loan Story: Life Can Take You By Surprise

 

 

 

 

 

 

“Honoring Family”
Personal Installment Loan Helps Family Reunite

 

 

 

 

 

 

“Experts on the Consumer Loan History”
Credit Expert Speaks About Small-dollar Personal Loans

 

 

 

 

 

 

“How One Loan Supports the Local Economy”
Mandy (Personal Loan Manager): Consumer Credit – The Economic Heartbeat of America

 

 

 

 

 

“Home for the Holidays”
Personal Loan Story – I Just Wanted A Loan With Dignity

 

 

 

 
 

 

“The Essential Loan”
(With Johnny Shaw – TN State Representative)
Importance of Installment Loan Programs

 

 

 

 

 

“A Personal Perspective on Life, the Economy & Moon Pie”
(With Johnny Shaw – TN State Representative)
TN Representative Shaw: Loan Industry Offers Dignity in Lending

 

 

 

 

“Perseverance and Observations”
Dr. Harold Black on the Personal Finance Industry

1:35 Minute Video

My Neighborhood Consumer Loan Company is the Lifeline
For My Business

Without Consumer Installment Loans, Bankruptcy and Loan Sharking Increases and Wealth is Destroyed

Discover How You Can Repair Your Own Credit Score