I awakened Thursday morning a little depressed. I don’t normally wake up in this condition but I knew a “Subcommittee on Financial Institutions and Consumer Credit” headed by Rep. Guiterrez (D-IL) was scheduled that day; Thursday April 2, 2009..
I was not very hopeful. The Payday Reform Act (H.R. 1214) outlines so-called “solid consumer protections for 23 states that have weak or nonexistent consumer protections from abusive lenders.” H.R. 1214 focuses on fees charged and the so-called “cycle of debt.”
Generally, when beaurocrats and regulators decide to address the payday loan industry it’s bad news. The result is often less consumer choices will be available for solving short-term financial problems and additional restrictions targeting the payday loan industry.
So… it was with a great deal of trepidation that I watched this hearing. I literally had butterflies in my stomach!
The result? Two hours later I felt great! Except for Maxine Waters and Jackie Speers, the members of the committee GET IT! They even responded to Jean Fox of the CRL with disdain! Her inability to present a thoughtful and realistic alternative to our product completely turned them off!
The real star was Ms. Guiterrez, a payday loan customer; someone who HAS ACTUALLY USED PAYDAY LOANS out of necessity. Ms Guiterrez was BRILLIANT! Reasoned and articulate, she did a great job of explaining the plight of a typical payday loan consumer. It was obvious she impressed the members of the “Subcommittee on Financial Institutions and Consumer Credit.”
Rep. Guiterrez, and the other committee members, continually focused on what alternative products exist to fill the void should the payday loan product go away. And the answer each time? SILENCE!
There were several industry representatives present who did a great job as well. We congratulate CFSA for stepping up to the plate and defending our industry vigorously!
We’ll come back to this event in the coming weeks for further analysis. Stay tuned!