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Bill Isaac’s United States Banker Article re: Payday Lending. CFPB Payday Plan Will Harm Those It Seeks to simply help

Bill Isaac had been president of this FDIC from 1981 through 1985, a tumultous time for the U.S. bank system. Their “take” in the CFPB’s proposed payday financing regs is interesting (see American Banker piece below). The high-cost cash loan company will perish beneath the CFPB’s proposed guidelines. This will be news that is good illegal loan sharks…..but perhaps not so great for the people looking for crisis loans…….

CFPB Payday Arrange Will Harm Those It Seeks to simply help

Reading the customer Financial Protection Bureau’s proposed guidelines for managing payday loans, i possibly couldn’t assist but remember the belated Yogi Berra’s line, “It’s like déjà vu once again,” alongside the oath that is hippocratic“First, do no harm”).

2 yrs ago, any office associated with Comptroller associated with Currency issued guidelines regulating non-collateralized, “advance deposit” loans – a bank item that bore considerable resemblance to nonbank pay day loans. Within times of the OCC’s promulgating its guidelines, every significant bank that offered the merchandise chose to pull it through the market.

The OCC’s 2013 guidelines imposed strict brand new underwriting demands to make sure that the debtor had the capacity to repay.