Congressional members comment on CFPB's proposed small-dollar lending rule

This story appeared in Bank Digest.

Senator Jeff Merkley (D-Ore) and several members of the House of Representatives have issued statements on the Consumer Financial Protection Bureau's new proposed rule on small dollar lending that would require lenders to take steps to ensure consumers have the ability to repay their loans, among other provisions. Merkley said, "This rule will help hardworking Americans keep more of their own money and finally create national protections to prevent families from being trapped in this inescapable vortex of debt."

Similarly, House Financial Services Committee Ranking Member Maxine Waters (D-Calif) said, "The CFPB has taken an important step today to rein in payday lenders that prey on financially vulnerable Americans." Taking a different view, House Financial Services Committee Chairman Jeb Hensarling (R-Texas) criticized CFPB Director Richard Cordray for deciding "for all Americans whether they can take out a small-dollar loan to meet emergency needs." Stating that such loans are sometimes the only option people have to pay expenses or start a business, Hensarling said, It's sheer arrogance to believe this Washington rule will help them."