AFSA Opposes Mis-Named “SAFE” Act
Today, a group of Democrat Senate and House members reintroduced legislation, the Stopping Abuse and Fraud in Electronic (SAFE) Lending Act. AFSA strongly opposes the mis-named legislation, which would actually harm, not help consumers. Among other things, the bill would prohibit convenience checks and require state-licensed installment lenders to register with the Consumer Financial Protection Bureau (CFPB). The co-sponsors provide no real rationale for why they are pushing for such changes, particularly in a time when their constituents may be most in need of access to credit.
Ultimately, the vast majority of borrowers who qualify for a personal loan with a traditional installment lender have minimal issues repaying the loans given the rigorous ability to repay standards and regularly scheduled loan structure AFSA members have implemented for their customers. Installment lenders create highly successful lending relationships with tangible benefits for borrowers. Limiting customer credit choices is counterproductive.
Given that the bill was introduced this late in the Congress, and has failed to pass in previous Congresses, it is unlikely that it will progress. However, AFSA will continue to monitor it.
November 17th, 2022 by Dan Bucherer