Smart Regulation
Smart regulations, fair competition, and increased innovation have always benefitted American consumers. However, this week, Congress focused on four proposals that would create more roadblocks for consumers and small business seeking loans, while considering policies that would limit competition among financial institutions and stymie data innovation.
- AFSA strongly supports lending equality and efforts to prevent credit discrimination. However, AFSA is concerned that The Fair Lending for All Act (H.R. 166) would not further that goal. Instead, it would create confusion for consumers and difficulty for creditors to comply with. It would also require lenders to ask invasive personal questions of borrowers. Although AFSA is unable to support this proposal in its current form, we stand ready to work with Congress to help develop legislation that ensure access to responsible credit for all.
- AFSA understands that the purpose of the Small Business Lending Disclosure Act (H.R. 6054) is to ensure that small businesses understand the loans that they’re taking out. We support that goal. However, the bill must be tailored so that it is serving the small businesses that would benefit from disclosure, while not creating needless compliance burdens for businesses that do not. Specifically, more disclosure is not necessary between dealers and their lenders.
- AFSA continues to vehemently oppose the Close the ILC Loophole Act (H.R. 5912), which bars the issuance of ILC charters moving forward, thus limiting new options for consumers. ILCs create more choices for consumers and create more competition among financial institutions for consumers’ business. That’s a good thing for the marketplace and for consumers.
- AFSA supports a national data privacy law, however the process that would be put in place by the American Data Privacy and Protection Act lacks clarity on several key issues. Importantly, this draft does not contain a clear Gramm-Leach-Bliley Act (GLBA) exemption. Companies that comply with GLBA already follow strict rules governing the secure handling of non-public personal information that keep consumer data safe and should not be subject to a new set of guidelines. Additionally, the inclusion of a blanket private right of action in federal privacy legislation would encourage a slew of abusive class-action lawsuits, which would hinder the ability of businesses to continue to innovate in the data space. A deliberative legislating process would result in clearer legislation that ensures consumers have long-lasting data privacy protections that do not inhibit innovation.
What’s Next
The Fair Lending for All Act (H.R. 166) is up for a vote in the House and will likely pass, but is unlikely to move forward in the Senate.
AFSA originally reported that the Small Business Lending Disclosure Act (H.R. 6054) was to be considered by the House Financial Services Committee along with the Close the ILC Loophole Act (H.R. 5912) on June 14. H.R. 6054 will not be considered by may come up again next month. The committee will consider H.R. 5912 and further House action will depend on what happens in committee.
The House Committee on Energy and Commerce’s Subcommittee on Consumer Protection and Commerce will hold a hearing June 14 on the American Data Privacy and Protection Act discussion draft. Sen. Maria Cantwell (D-WA) still has no co-sponsored for this version of the bill.
June 9th, 2022 by Dan Bucherer
