American Financial Services Association

Consumer “Advocate”: Blood, Sweat and Tears Are All You Need

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Consumer “Advocate”: Blood, Sweat and Tears Are All You Need

Occasionally someone slips and says something they are thinking but know they should never actually say publicly. This is what happened to poor Sara Nelson-Pallmeyer of Exodus Lending, a Minnesota-based nonprofit that claims to “advocate for fair lending laws.”

In a recent story Nelson-Pallmeyer indirectly acknowledged that rate caps bar many consumers she claims to want to help – those who need access to small dollar credit but who do not have access to savings or credit cards, or who have less than prime credit – from accessing consumer credit products. The article noted that Nelson-Pallmeyer was “not worried about how consumers will fare,” and that:

“‘They’re going to do what people do in states where [non-rate-capped loans] aren’t allowed,” [Nelson-Pallmeyer] says. “Borrow from people you care about, ask for more hours, take on a second job, sell your plasma — just the things that people do who don’t go to payday lenders, and that’s most people.”

“Most people” have choices for their consumer credit needs, and many of them if they can’t count on savings or credit cards, turn to Traditional Installment Loans (TILs), which are safe, smart options. But such facts are unimportant to some consumer “advocates” who prefer those they “help” using blood, sweat and tears to cover their emergency financial needs.

Traditional Installment Loans (TILs) have consistent monthly payments, and no balloon payments or hidden fees. Traditional installment lenders work with customers to understand their financial needs and circumstances, and work to ensure customers understand the terms. TILs are reported to credit bureaus, so the customer can build or improve their credit standing.

It’s also important to note that Nelson-Pallmeyer isn’t talking about just a few customers. In fact, when Illinois recently passed a 36% rate cap, tens of thousands of Illinois consumers no longer qualified for traditional installment loans, leaving them to fend via the “Nelson-Pallmeyer Plan”: second jobs or blood banks.

In times of financial need, “Sorry, you have no choice but to sell your blood,” is not what folks need to hear, especially when it’s the people who claim to be “advocating” for them who are doing the lecturing.

July 16th, 2021 by