Clearly, the MLA is not meeting its goals and it would be unwise to impose these unintended consequences on American consumers as a whole.
November 13, 2019
Following the news that Rep. Jesus “Chuy” Garcia (D-Ill.) And Rep. Glenn Grothman (R-Wisc.) Introduced legislation that would eliminate secure access to credit for millions of Americans and make the more difficult task for unprivileged consumers. To find loans, Mary Jackson, CEO of Online Lenders Alliance, issued the following statement:
“It is disappointing that Representatives Garcia and Grothman have used the sacrifice and dedication of American veterans as political cover for their legislation to eliminate credit options for people who need secure and reliable access to loans. Many Americans who do not have top-notch credit scores depend on safe, regulated, short-term credit products to avoid bad checks, skip bill payments, or fall behind, which can lead to results. dramatic.
“An honest calculation of the Military Loans Act (MLA) shows that the MLA increased financial insecurity among the military, resulting in depletion of savings, dependence on the relief company or family for money, and leaving unpaid bills, according to the DOD report ‘Report: Improving consumer credit protections for members of the armed forces and their dependents’ from April 2014. The report Blue Star Families’ 2018 ‘Military Family Lifestyles Survey’ found that financial issues / stress were the number one stressor among active duty members, veterans, and their spouses, echoing the conclusion of the DoD that reducing access to credit does not increase financial well-being. Representatives Garcia and Grothman will leave 100 million Americans with the same problem as the overly restrictive MLA caused to the military according to the report. t of DoD – they are much less likely to be able to cover “one or more essential unforeseen expenses”.
According to a Harris poll conducted earlier this year, the number of active military personnel paying their bills on time has increased from 83% in 2014 to 63% today. In addition, the number of active military personnel who report currently having debts in collection has almost quadrupled, from 3% in 2014 to 11% today. Clearly, the MLA is not meeting its goals and it would be unwise to impose these unintended consequences on American consumers as a whole.
The OLA and its members support good regulation based on facts and market realities. Approved lenders in the United States comply with 19 federal laws designed to prevent abusive lending practices that are fraudulent or deceptive. Lenders are using new data sources and advanced analytics to assess the ability to repay loans and price loans based on risk. Over the past decade, the short-term lump sum loan has been largely replaced by credit products offering multiple payments that can be amortized over several months, installment loans, and lines of credit with disclosed rates and fees.
People need access to safe, regulated credit that can help them build a strong credit history or overcome financial difficulties, allowing them to move forward in their financial lives. Garcia-Grothman legislation eliminates these options, overrides their credit choices and delays them, forcing workers to reject checks, miss payments or do without the essentials.
For these reasons, we vigorously oppose this legislation and encourage Congress to follow suit.
About the Alliance of Online Lenders
The Online Lenders Alliance (OLA) is the premier trade association for FinTech. OLA is focused on credit inclusion, bringing together a diverse group of innovative companies who share a common goal: to serve hardworking Americans who deserve access to trustworthy credit. Our members are entrepreneurs, publicly traded companies, lenders, credit bureaus, advertisers, lead generators, compliance professionals, and software developers who leverage technology to responsibly improve business performance. the financial health of consumers. Consumer protection is our top priority and OLA members adhere to a rigorous set of best practices and code of conduct to ensure consumers are fully informed and treated fairly. For more information and to view our latest policy white paper, highlighting how FinTech innovation plays a role in including credit for the roughly 100 million Americans who currently fall into the category. non-privileged credits, please visit http://www.onlinelendersalliance.org.
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