June 2, 2016
If the rules go through unchanged, most of the industry’s lenders will go out of business. Ohio’s economy will take a $1 billion hit with more than 10,000 jobs in jeopardy. At first glance, it looks like the Bureau’s trying to regulate us out of business. What they can’t eliminate is the demand for short-term credit. We believe the CFPB should focus on broadening options for borrowers, not forcing existing market providers to shutter their doors.
The CFPB’s rules will greatly reduce or eliminate short-term lending options for more than 2 million underbanked Ohioans. That’s the opposite of the Bureau’s mandate in Dodd-Frank. The CFPB was created to protect borrowers and increase their access to credit options, not push them to unlicensed offshore lenders. Forcing every short-term lender in the country to close down doesn’t eliminate the need for short-term credit. It just puts more strain on the people the CFPB’s supposed to protect.
There’s a common misperception that the short-term lending industry is extremely profitably. Public earnings reports tell a different story. Profit margins are tight. Tight margins and risk are why there aren’t more options in the marketplace. Our model is the only private-sector solution that actually works. Every new regulation comes with a hidden cost, and eventually that cost forces our member companies underwater.
Ohio Consumer Lenders Association
About The Ohio Consumer Lenders Association
The mission of Ohio Consumer Lenders Association (OCLA) is to promote the common business interests of consumer financial services organizations operating in Ohio and to provide a forum for industry-wide consideration of the means for making credit available to middle class Ohioans on reasonable terms and conditions. OCLA works to promote laws and regulations that balance strong consumer protections while preserving access to a diverse credit market. All OCLA members abide by a code of Best Practices that provide appropriate safeguards for Ohio consumers. These Best Practices are intended to assist consumers in understanding the costs and responsibilities associated with short-term credit and to provide adequate and clear disclosures to allow consumers to make informed financial decisions. Furthermore the association promotes ethical transparent business policies such as easy to understand contracts, appropriate debt collection practices and honest advertising. OCLA members are held to the highest standards and pledge to provide quality financial products.