Those people who rely on small-dollar loans are real Americans

1. Those people who rely on small-dollar loans are real Americans Bureaucrats in Washington are often accused of being out of touch with the citizens who pay their salaries. Time after time, Washington elites make decisions about education, healthcare and taxes that show they’re out of step with the needs and wants of American voters. A perfect example of this disconnect came last October, when Richard Cordray, then director of the Consumer Financial Protection Bureau, released his Vehicle, Title, and Other High-Cost Installment Loans Rule – also known as the small-dollar loan rule. Now millions of people are at risk of losing access to much-needed credit. For most Americans — especially those who are more financially secure —the CFPB’s rule may have gone largely unnoticed. There wasn’t a big debate in Congress; and if you rely on traditional banking services you likely won’t feel the impact. But I know the effect this rule will have, because I’ve used these small-dollar loans, and they helped me get my life on track. The CFPB claims these regulations are essential to protect consumers; but this is simply not the case. Financial decisions should be left to the consumer; only the consumer can truly protect themselves and know their dire financial needs. Worse, these rules will do more harm than good — putting 80 percent of lenders out of business and leaving the more than 15 million American households who use these loans each year with nowhere to turn but the unregulated market. Additionally, tens of thousands of the hard-working people employed in the industry will lose their jobs.

2. While it might be easy for those at the CFPB to live without these loans, the same cannot be said for those without generous salaries and benefit packages. Customers who use small-dollar loans are typically employed; but they still struggle to make ends meet and cannot meet the requirements for traditional funding options. And now, Washington threatens to make that struggle even harder. Let’s be clear: If the government takes away this legal, regulated option for credit, many customers will still need to find a way to pay for living expenses and unexpected emergencies like having to repair a heater this winter. Without these loans, many will get that money in a more dangerous way. Others will find themselves even deeper in debt. I know this is true, not because I’m an economist who has studied the regulations, or because I have worked with people in this business, but because it’s my story. In my new book, The Journey Back to Now, I write about my experience growing up in public housing and later spending time in federal prison for selling drugs. When I got out of prison and wanted to turn my life around, a payday loan allowed me to start my commercial cleaning business, Imperial Cleaning Systems, Inc. As many small business owners will tell you, starting a company isn’t easy — there never seems to be enough money. I needed a simple $1,000 loan to get myself up and running; but I quickly found out that banks and credit unions have regulations and rules that typically hinder those with a criminal background and a turbulent financial history. It’s true, I had made mistakes in my past, but this meant I found myself without any options to legitimately pick up the pieces and move forward with my life after my release. I had two choices: Return to my old ways and earn money on the streets, or try for a personal loan to keep my business afloat. Advance Financial, a local financial service center in Nashville, took a chance on me and loaned me the resources I needed to get started. These loans saved my business, and they no doubt saved my life. Today, Imperial Cleaning Systems employs more than 20 people in Nashville. Since Washington started its witch hunt against payday lenders, I’ve also spent time learning a lot more about the industry. I’ve discovered I’m certainly not alone in understanding and benefiting from these small-dollar loans. In fact, one recent study found a majority (63 percent) of customers who used payday loans believe the companies provided them with good information about the fees and risks. The good news is that Washington can make this right. Congress can stop these harmful regulations and protect millions of Americans’ access to credit by taking action under the Congressional Review Act. A bill to do this has been introduced and it has over 20 sponsors. I am hopeful that it will be passed soon and signed into law. They say all politics is personal. Most members of Congress probably don’t have trouble getting a loan, so their vote might not have a direct impact on them — but it is personal to me. And it will have an impact on millions of Americans like me who don’t have financial freedom. It’s time for Congress to act before it’s too late. Robert Sherrill is a minority business owner and the CEO of Imperial Cleaning Systems, Inc. in Nashville, Tenn. Sherrill’s Imperial Cleaning Services has a cleaning contract with a local payday lender, Advance Financial. Original Source: https://goo.gl/6D29B7