Last week the Consumer Financial Protection Bureau (CFPB) held its first ever “field hearing” to better understand payday loans and the consumers that use them. The hearing began an interesting and ongoing dialog between the CFPB, underbanked consumers, and industry and community leaders. Not everyone agrees on the way to best reach underbanked consumers but one thing that everyone agrees on is that underbanked consumers need and deserve competitively priced, transparent products.
We were especially interested in Congressman Alcee L. Hastings’s input via a letter written to CFPB Director Richard Cordray. In the letter, he addresses some key advantages of non-bank financial services and the valuable role they play in underbanked communities. Congressman Hastings encouraged Corday to educate and assist consumers rather than push out innovation and non-bank products that have stepped in to provide much-needed alternatives.
Congressman Hastings also pointed out how the payday lending market is focused on protecting their customers saying: “It is important that the [CFPB] recognize and acknowledge the proactive best practices and radical reforms many lenders that offer payday loans have undertaken, unlike many other sectors in the financial services industry.”
We couldn’t agree more. As advocates of fair and transparent non-bank financial products, we believe that non-banks should not only be held to a high standard but should lead the financial services industry in innovation and transparency. At Think Finance, we call it Banking for the Rest of Us.