This week, the Congressional Black Caucus Institute’s (CBCI) 21st Century Council published its 2022 Annual Report, which addresses a variety of major policies and regulations currently affecting the United States, including topics focused on access to consumer credit.
Specifically, the report highlighted the importance of maintaining a financial marketplace that allows Americans to access small-dollar credit, especially for borrowers who may have a non-prime credit score (credit score below 670) and are seeking affordable and predictable types of credit products.
Most notably, the report cited “proposals to protect consumers from predatory practices through a 36% rate cap would cause more harm than help by limiting consumer access to credit.” (p. 65).
The structure of a loan is best judged by its quality, affordability, and soundness, not its “all-in” APR calculation. By designing financial products based on each customer’s unique circumstances, such as providing longer-term repayment schedules, assessing consumers’ ability to repay, limits on fees, and reporting to credit bureaus, consumers have an opportunity to find an economic solution that fits their specific financial needs. AFSA has advocated for this approach at both the federal state levels for years and will continue to in the future.
Also included in the CBCI’s 21st Century Council Annual Report are the advantages of intense competition for consumers trying to own a vehicle at a low price in the auto finance marketplace. (p. 72).
By having “multiple sources of financing for automobile purchasing,” such as vehicle finance companies, captive finance companies, credit unions, and banks, the availability of credit increases, and consumers can find more affordable vehicle loan products.
The report also noted some vehicle finance organizations have developed financial education programs targeted at the car buying and leasing process. AFSA partners with the National Association of Auto Dealers on AWARE, or Americans Well-informed on Automobile Retailing Economics, which works to build a greater understanding among consumers about how auto financing works.
AFSA applauds the Congressional Black Caucus Institute’s 21st Century Council 2022 Annual Report citing the benefits of a responsible small-dollar credit for consumers and for encouraging more market competition in the vehicle finance industry.
CBCI Report Finds Rate Caps Harmful
Mar 10, 2022
This week, the Congressional Black Caucus Institute’s (CBCI) 21st Century Council published its 2022 Annual Report, which addresses a variety of major policies and regulations currently affecting the United States, including topics … Read the rest
WOMAN LEADER OF THE DAY | Anne Kurz
Mar 09, 2022
AFSA is proud to celebrate the crucial role female executives play throughout the financial services industry. From small companies to large, installment loans to vehicle finance products, female leaders are building the future of our … Read the rest
NM HB 132 Signing and Comment Letter
Mar 09, 2022
On Tuesday March 1, New Mexico Governor Michelle Lujan Grisham (D) signed HB 132/Chapter 23 into law. Effective January 1, 2023, this new law creates a 36 percent all-in Annual Percentage Rate (APR) rate cap. Once it takes effect, New Mexico… Read the rest
Woman Leader of the Day | Marguerite Watanabe
Mar 08, 2022
AFSA is proud to celebrate the crucial role female executives play throughout the financial services industry. From small companies to large, installment loans to vehicle finance products, female leaders are building the future of our … Read the rest
News from our Members | PayNearMe Announces PayPal,Venmo Integrations
Mar 08, 2022
PayNearMe announced the addition of PayPal and Venmo to its growing list of modern payment options in the US. These new… Read the rest
AFSA Comments on Arbitration Hearing
Mar 08, 2022
Yesterday, AFSA submitted a comment letter to Senate Committee on Banking, Housing, and Urban Development Chairman Sherrod Brown (D-OH) and Ranking Member Patrick Toomey (R-PA) on the committee’s upcoming hearing regarding arbitration.… Read the rest
Woman Leader of the Day | Ginger Herring
Mar 07, 2022
AFSA is proud to celebrate the crucial role female executives play throughout the financial services industry. From small companies to large, installment loans to vehicle finance products, female leaders are building the future of our … Read the rest
Rate Caps Reduce Competition
Mar 06, 2022
The American Financial Services Association (AFSA) yesterday sent a comment letter to Secretary of the Treasury Janet Yellen highlighting new research on the significant drop of credit availability in areas where rate caps are present.… Read the rest
Woman Leader of the Day | Mara McNeill
Mar 04, 2022
AFSA is proud to celebrate the crucial role female executives play throughout the financial services industry. From small companies to large, installment loans to vehicle finance products, female leaders are building the future of our … Read the rest
AFSA Welcomes Perc Pineda, PhD
Mar 03, 2022
AFSA is pleased to welcome Perc Pineda, PhD as Chief Economist and Vice President of Research, serving as the primary expert on economics, statistics, and industry research supporting the organization’s advocacy efforts.
“For more than… Read the rest