Chairman Neugebauer, Ranking Member Clay, and people of the Subcommittee, many thanks for the possibility to testify today concerning the customer Financial Protection Bureau’s (Bureau or CFPB) substantial and ongoing work linked to payday lending. I’m David Silberman, and I also act as Associate Director for analysis, Markets, and laws in the CFPB, a posture we have actually held since 2011. Final i also was named as Acting Deputy Director month.
In 2010, I joined the Bureau as part of the implementation team november.
before the Bureau, I served as General Counsel and Executive Vice President of Kessler Financial solutions, a privately-held business focused on making and supporting bank card as well as other monetary solutions to membership businesses. My participation in customer services that are installment loans Mississippi financial whenever I had been Deputy General Counsel of this AFL-CIO. While in the AFL-CIO, we aided to generate a business to produce monetary solutions to union users together with AFL-CIO credit card that is first system. We started my profession as being a statutory law clerk to Justice Thurgood Marshall.
You may already know, the CFPB may be the nation’s very very first federal agency with a single concentrate on protecting customers when you look at the consumer monetary market. The Bureau is working to restore consumer trust in the financial marketplace and to level the regulatory playing field for honest businesses through fair rules, grounded on evidence-based findings and stakeholder input, consistent oversight, appropriate enforcement, and broad-based consumer engagement. Up to now, our enforcement actions have actually helped secure roughly $11.2 billion in relief for an incredible number of customers victimized by violations of Federal consumer laws that are financial.
Since 2011, I have led the analysis, Markets, and Regulations Division. The division is in charge of articulating a research-driven, evidence-based viewpoint on customer financial areas, customer behavior, and laws, informing Bureau thinking on priority areas, determining areas where Bureau intervention may improve market results, and supporting efforts to lessen outdated, unneeded, or unduly burdensome laws.
Where our research and analysis indicates the necessity for regulatory intervention, the Bureau seeks to produce laws that may protect customers without unintended consequences or costs that are unnecessary. Included in the rulemaking procedure, the Bureau very carefully assesses the advantages and expenses that the regulations we think about might have on customers and finance institutions. Balanced regulations are crucial for protecting customers from harmful techniques and making certain customer monetary markets work in a reasonable, clear, and manner that is competitive.
Considering that the topic of today’s hearing could be the Bureau’s utilize respect to short-term, little buck financing, I want to start with tracing the Bureau’s work with this area.
As soon as the Dodd-Frank Wall Street Reform and customer Protection Act (Dodd-Frank Act)
ended up being enacted, pay day loans had been an area that is particular of to Congress. Certainly, the Dodd-Frank Act provides the Bureau authority that is plenary supervise any entity which provides pay day loans no matter size. Because of this, once the Bureau started supervising non-depository organizations in 2012, payday financing had been the initial industry that has been brought into our supervisory system. Compared to that end, the Bureau developed assessment procedures for tiny buck loan providers that have been posted included in the Bureau’s Supervision and Examination handbook, which can be available on our web site, consumerfinance.gov.
Bureau examiners utilize the assessment procedures into the handbook to make sure payday lenders – depositories and non-depositories – are complying with Federal customer monetary legislation. Especially, the Short-Term, Small Dollar Lending Procedures describe the sorts of information that the agency’s examiners will gather to gauge payday lenders’ compliance administration systems (CMS), assess whether loan providers come in compliance with Federal customer economic rules, and determine dangers to customers for the financing process. The procedures monitor key lending that is payday, from initial adverts and advertising to collection methods.
