SBA’s Office of Advocacy Goes to Bat for Payday Lenders

| By:

SBA's Office of Advocacy

What’s the Small Business Administration’s Office of Advocacy doing advocating for payday lenders? Well they’re small businesses first and foremost, according to a letter submitted to CFPB Director Richard Cordray, and the CFPB’s short-term lending proposal puts them at risk.

Coming in at a cool 1,341 pages, the proposal no doubt exudes costly compliance. And it’s not just lawyers and compliance officers that payday lenders need to worry about, they’re also asked to forfeit some of their major profit centers, a condition that has left many of them outraged. In a roundtable convened by the Office of Advocacy, “some [short-term lenders] stated that they may experience revenue reductions of greater than 70 percent and be forced to exit the market.”

The CFPB has more-or-less acknowledged these steep revenue loss projections and if you read between the lines, having these companies be forced to exit the market seems to be the unspoken consequence they’re probably hoping for.

But at what cost?

“The CFPB’s proposed rule may force legitimate businesses to cease operation,” The Office of Advocacy argues. “Imposing such a regulation will not alleviate a consumer’s financial situation. The consumer will still need to pay his/her bills and other expenses. Imposing these strict regulations may deprive consumers of a means of addressing their financial situation.”

Last modified: October 17, 2016

Category: Regulation

Home Regulation › SBA’s Office of Advocacy Goes to Bat for Payday Lenders

    Fenix Capital Funding

    South End Capital

    Better Accounting Solutions

    Global Funding Experts

    Pearl Capital

    National Funding

    Unique Funding Solutions

    AMA Recovery


    Velocity Capital Group

    Forward Financing

    IAC - In Advance Capital

    Big Think Capital


    The Smarter Merchant

    ROK Financial

    Vox Funding

    Hunter Caroline


    Meridian Leads

    CFG Merchant Solutions


    Flash Advance


    Total Merchant Resources


    Amerifi Capital