There are lots of subjects that divide people on a regular basis. Folks who love one form of music, may despise another musical form. Some people think spending time outdoors is amazing, while others don’t like to venture too far from their favorite living room chair. And forget about trying to get conservatives and liberals to agree on much of anything. Another decisive issue that is getting a lot of attention lately is that of short term lending. Some consumer advocates believe that these loans are the worst thing in the world, while others believe that payday lending companies provide a valuable service to their customers. There’s just no reaching a middle ground on some subjects.
Many who fashion themselves as consumer protectors have a deep seated hatred of short term loans, and view the providers of these loans in a bad light. People who tend to favor consumer choice usually believe that grown people in this country are fully capable and allowed to make choices about the types of financial products and services they choose to pay for; even if a loan has expensive fees to pay, these folks believe that everyone should have the freedom of choice to decide on their own.
As far apart as these two groups seem to be, there may actually be some common ground that both sides are not even aware of: They both want consumers to get reasonable access to lines of credit, and expect that those products are priced fairly for the people that use them. Once you get past that basic fact, though, the contention between both sides begins to heat up to a point where some people get downright nasty about the topic.
For example, there are news stories now about how the Consumer Financial Protection Bureau (CFPB) – the most powerful and vociferous of all the groups against payday lending – has been violating the sovereignty of Native American tribes as a part of their efforts to introduce new regulations on the payday lending industry. This industry happens to be a major source of income and employment for some tribes. This is a precarious battle that will likely wage for some time to come.
The Public Affairs Head for Advance American Jamie Fulmer said, “What strikes us is that when the Bureau was established by Professor and now Senator Warren and Director Cordray, there was a lot of talk about the need not to dictate consumer choice but to provide a level playing field across a broad spectrum of financial services companies.” Fulmer went on to note that the financial landscape right now is not so level right now.
In a recent interview Fulmer explained, “Customers are redefining what mainstream customer services are. We think the type of loan we are type of providing falls strongly in the mainstream, because consumers find that they have an increased, yet regular, need for small dollar short-term credit. We believe that was the correct approach and it was rooted in ensuring simplicity, transparency and full and complete and understandable disclosure.”
As to whether or not the CFPB and the major players in the payday lending industry can ever come to an understanding is something that we will all have to wait and see. However, more people – both private citizens and elected officials – are now starting to come out of the woodwork in support of the freedom of financial choice that payday lenders provide to their customers. Proponents of payday lending seem willing to reach common ground; the ball is now in the court of the CFPB.