Elizabeth Warren: We need oversight of non-bank lenders, too
Professor Elizabeth Warren has identified yet another reason to support the Consumer Financial Protection Agency, and provides evidence to prove her point in her latest article, “Real Change: Turning up the heat on non-bank lenders.”
Warren’s writing is clear enough that you can read her article to get the full story, but her basic argument is worth restating: lenders should be regulated not by who they are and how they’re chartered, but by how they do business and what kinds of financial products they provide. Consumer financial protection has never been approached this way, and the lack of coverage of certain lenders led to gaps which greatly contributed to the current consumer crisis.
Instead of continuing to give states sole jurisdiction over regulating non-bank lenders, these entities should be covered by the proposed CFPA. As Prof. Warren says, they should be regulated “using the same rules for all mortgages or for all small dollar loans, regardless of whether the mortgage or loan is issued by a national bank, a state bank, or a non-bank.”
It’s time to even the playing field, which should include the regulation of all lenders. When this happens, the CFPA will be able to track all lending and maintain a consistent standard while finally giving consumers a fighting chance.