Trade group calls for regulations that are clear to protect consumers, and certain so businesses can ensure consumers can safely access credit when they need it
WASHINGTON, March 6, 2024 /PRNewswire/ — In response to vague, overreaching Consumer Financial Protection Bureau (CFPB) policies that are harming – not helping – consumers, the American Financial Services Association (AFSA) today issued a call for the agency to use the traditional, consultative rulemaking process to set clear rules of the road for financial services and other industries the CFPB regulates.
“Instead of attempting to set rules through one-off and nontransparent enforcement proceedings or overly broad and unclear guidance, AFSA and its members want the CFPB to use the well-accepted administrative rulemaking process when needed so that all players – consumers, businesses, advocacy groups and policymakers – can provide input,” said AFSA President and CEO Bill Himpler. “Consumers and our industry need clarity, not confusion, to ensure all consumers can access the credit they need.”
Over the past year, the CFPB has launched enforcement actions that cite business practices it alleges are violations, but which are legal under state laws. The agency is also punishing creditors for not asking about such costs as groceries or childcare before making a loan, and requiring for the first time that certain lenders ask customers for such information as sexual orientation, and to report it to the agency.
As part of a national education effort, AFSA members are reiterating their industry’s long-held Consumer Credit Protections, which the more-than-a-century-old trade group says should help guide the CFPB in its rulemaking process. The protections include:
- Consumer Confidence: Consumers deserve choices in loan products they can be confident will provide benefits and meet their needs.
- The Right Price: Loans should be affordable and not trap borrowers in cycles of debt.
- Clarity and Certainty: Loan terms must be understandable, with documents that include all costs, clear terms, and conditions.
- Privacy and Security: Consumers must be confident that their personal information and sensitive data is protected and respected by those with whom they do business and by regulators that have access to that data.
“Our industry has served consumers from all walks of life and all financial standings for decades,” said Celia Winslow, AFSA’s senior vice president overseeing federal government affairs. “Our members serve the communities that they live in and want to offer their neighbors the credit they need, whether for an emergency or to finance a family vacation.”
Himpler added, “Our industry is already highly regulated at the state and federal levels and makes every effort to play by the rules and serve customers well. All we’re asking is that the CFPB fulfill its responsibility and give us clear rules to follow.”
AFSA and its members support congressional oversight of the CFPB, but stress that they also want to work with the agency to develop regulations that protect consumers while ensuring they have choices for their credit and provide clear and easy-to-follow guidelines to lenders.
Himpler emphasized, “Americans need credit and should be empowered to build positive credit histories with major credit bureaus. The CFPB can create reasonable regulations – clear rules of the road – that protect consumers’ access to credit, which is crucial to financial stability and economic mobility, and we want to work with the agency to ensure that happens.”