Protect Access to Safe, Responsible Traditional Installment Loans
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For more than a century, traditional installment lending has proven to be the most affordable and responsible form of consumer credit for working Americans. Before the Internet, the local branch of an installment lender was often the only access to credit for many Americans. They are community-based lenders in cities and towns nationwide. Compared to other forms of small-dollar credit, installment loans are the best way for consumers to manage credit and build a positive payment history with the credit bureaus.
For millions of American families, living paycheck-to-paycheck is nothing new and accessing credit or bank loans isn’t a real option. This means that when it comes to borrowing money, many consumers have limited choices. This problem is exacerbated as lenders face increased scrutiny from federal regulators who are lumping installment lenders in with payday or title loan lenders.
Traditional installment loans provide credit to individuals and families. The most common uses are for vehicle repairs (transmission, tires), household appliances (washer, dryer, water heater), and medical expenses – generally, the everyday items and services essential to live productive and enjoyable lives.
Unlike other forms of small-dollar credit, traditional installment loans do not charge penalties for early repayment and do not require large one-time balloon payments. Traditional installment loans are paid off through equal monthly payments of principal and interest that provide a tool for managing household finances. Best of all, lenders report to credit bureaus, allowing consumers to build or repair their credit when they make their payments.
The Consumer Financial Protection Bureau’s (CFPB) proposed rule will drastically reduce your ability to get safe, responsible consumer credit in the form of traditional installment loans. Traditional installment loans that you can get will be more expensive because traditional installment lenders of all sizes will be forced to comply with burdensome, mortgage-like application processes.
Tell Washington bureaucrats to stay out of your financial business!
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