By David Williams, President of Taxpayers Protection Alliance
Those who have been keeping a watchful eye on all things consumer finance are aware of the recent news that has surfaced following the Supreme Court’s decision to classify the Consumer Financial Protection Bureau’s (CFPB) funding mechanism as constitutional.
But, contrary to popular belief, this ruling only proves that Congress needs to put the reins on the CFPB and control its outrageous overreach that will harm consumers and small businesses. In fact, it is imposing regulations so burdensome that many small business lenders are left confused and unsure where to turn next.
The mandate of the CFPB is to formulate policies that safeguard consumers and provide clear guidance to consumer credit firms. However, the complexity and ambiguity of its recent policies pose a risk of limiting access to credit for millions of consumers, particularly at a time when the need for credit is crucial for many Americans.
The CFPB’s regulatory brigade has created a climate of uncertainty within the consumer finance industry. A notable example is a rule finalized in March, which sets a cap of $8 on late fees for credit card companies. However, there appears to have been an oversight by the CFPB regarding the broader impact of this rule, particularly on small business lenders. These lenders have expressed legitimate worries about how this cap may affect the creditworthiness assessments of their future borrowers.
Aside from the concerns raised by lenders, taxpayers should also rightfully be wary of the rule. The regulation practically encourages borrowers to pay their bills late and leaves the ones paying on time left to pick up the cost.
Read more in Newsmax