A new study, currently posted for public comment, has found that rate caps prevent Americans from accessing high-quality credit products they need and want.
The study, entitled Effects of Illinois’ 36% Interest Rate Cap on Small-Dollar Credit Availability and Financial Well-being, is authored by J. Brandon Bolen of Mississippi College, Gregory Elliehausen of the Board of Governors of the Federal Reserve System and Dr. Thomas Miller, Mississippi State University, Jack R. Lee Chair of Financial Institutions and Consumer Finance.
The research found that after the imposition of a 36% all-in rate cap in Illinois, several lenders left the state entirely. This reduced the number of available loans to subprime borrowers by 36% (29,000); 57% (4,700) of deep subprime borrowers by were even harder hit. The data also found that the consumers who still were able to qualify for a loan were forced to take out large loans, thereby making them more expensive.
The upshot: There are lots of consumers who want small dollar loan, but due to the rate cap cannot get them.
The study has already garnered attention from Real Clear Markets and Forbes and AFSA is working to ensure that policymakers inside the Beltway and nationwide are aware of harm rate caps are causing American families.
STUDY: Rate Caps Hurt American Families
Jan 05, 2023
A new study, currently posted for public comment, has found that rate caps prevent Americans from accessing high-quality credit products they need and want.
The study, entitled Effects of Illinois’ 36% Interest Rate Cap on Small-Dollar… Read the rest
Come for the content, stay for the concert
Jan 04, 2023
AFSA conferences are chock full of great sessions and networking opportunities.
You will not want to miss an “After Hours” concert with East/West Records America recording artist John Splithoff on Wednesday, January … Read the rest
MoneySKILL Featured in OCC Financial Literacy Update
Jan 03, 2023
The AFSA Education Foundation’s MoneySKILL® was featured in the Office of the Comptroller of the Currency’s (OCC) first quarter 2023 Financial Literacy Update.
The OCC’s Financial Literacy Update is a quarterly e-newsletter that reports… Read the rest
AFSA Responds to CFPB Servicemember Press Release
Dec 29, 2022
Today, AFSA responded to the Consumer Financial Protection Bureau’s CFPB Finds Members of the Reserves and National Guard Paying Millions of Dollars in Extra Interest Each Year press release. The Servicemembers Civil Relief Act (SCRA) … Read the rest
AFSA, Trades Comment on Bureau Auto Lending Announcement
Dec 28, 2022
Last week, AFSA, along with many other trade associations, submitted a comment letter to the Consumer Financial Protection Bureau (CFPB) in response to its announcement seeking additional information on auto lending. The letter laid out… Read the rest
AFSA’s 2022 By The Numbers
Dec 19, 2022
CFPB Director Testifies Before Congress
Dec 15, 2022
Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra testified before the House Financial Services Committee yesterday. Members of the committee took the opportunity to address concerns over the Bureau’s use of a long dormant… Read the rest
CEO IMPERATIVES: 2023 PRIORITIES & PREDICTIONS
Dec 14, 2022
AFSA’s great strength is the depth and breadth of the knowledge and expertise of our members; that expertise that will be on display at the 2023 Vehicle Finance Conference & Expo with our famous CEO Panel.
Our industry leaders … Read the rest
CFPB Proposes Nonbank Registry
Dec 13, 2022
This week, the Consumer Financial Protection Bureau published a proposed rule called Registry of Nonbank Covered Persons Subject to Certain Agency and Court Orders. According to the proposed rule, the Bureau would require covered entities… Read the rest
On Partnerships: The Fast Track To Innovation And Efficiency
Dec 08, 2022
Join us today at 2:00 p.m. for On Partnerships: The Fast Track To Innovation And Efficiency, sponsored by defiSOLUTIONS.
What can or should vendors do as partners to deliver market-changing technology and innovations? Join long-time industry… Read the rest