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The first protection a consumer needs is the assurance that any new reforms will not inadvertently drive all regulated credit from the market.
March 23 -
The Consumer Financial Protection Bureau faces a tough balancing act as it seeks to issues a proposal to rein in high-cost payday loans. A chief concern is what will replace payday lenders if federal regulations force many of them to shut down.
March 21 -
The Consumer Financial Protection Bureau's plans for revamping payday lending set off a fierce debate Thursday over whether the agency had gone too far or not far enough, proving that this is likely to be one the trickiest rulemakings the agency will ever attempt.
March 26
In a March 23
In his argument, Isaac
While Isaac raised some important points from the report, there are other critical points that he omitted that provide needed context. Chiefly, some of today's credit products and practices risk leaving consumers trapped in a cycle of debt. Analyses by
We agree that the need for safe financial products, including credit products, won't disappear for low- and moderate-income consumers; and that if regulators clamp down on current products, their focus should be on promoting safe, affordable alternatives to meeting small-dollar credit needs. Consumers have a market need that should be met, but hard work is left to find products that make sense for both lenders and consumers. Urban Institute roundtables identified an important agenda for further research and action, and Urban is eager to work with policymakers, consumers, and providers to find new solutions that work.
Signe-Mary McKernan and Caroline Ratcliffe are senior fellows, and Caleb Quakenbush is a research associate, at the Urban Institute.