The Consumer Financial Protection Bureau, the creation and hobby horse of Senator Elizabeth Warren, might be facing the risk of getting brutally incapacitated by a Republican Congress. It might even face getting pulled to pieces completely. Payday moneylenders have already begun celebrating, taking victory laps believing that the rules suggested by the bureau, on which they had stressed on for so many years – the limitation of payday loans with high rates of interest and putting a finish to the suggestions of an arbitration clause in customer contracts, will never come to fruition.
The Dodd-Frank guidelines to restrict risks taken by banks and control their behavior ever since the 2008 economic disaster passed after a bloody game of political fights are big fishes and a major target for President of the United States, Mr. Donald Trump, and conservative officials.
After a shocking federal court judgment restraining the Consumer Financial Protection Bureau’s self-rule and autonomous way of functioning, there are rumors about Trump supposedly looking to act on the threats of firing Director Richard Cordray on his first day of presidency. The common perception among the insiders is that they are expecting the CFPB to get severely handicapped in terms of their power and reach. So far, everybody is not in misery. In particular residences of the consumer economy biosphere, some analysts are hopeful that Trump, by reduction of regulations, will inspire invention that will serve well for the American people who have been struggling to cope up with the old banking system.
Even though debates over the Consumer Financial Protection Bureau and their proposed regulations and their effects on the payday lending industry stormed on in the masses in past years, a greater discussion over serving helpless customers was taking form under the cracks in the system. It was placed on Fintech, the economic technology industry that started moving hostilely into the marketplace for deadlocked customers, guaranteeing the reform of payday advances and monetary goods having high rates of interest, putting to use – Big Data and the influence of technological expertise. Supported by Silicon Valley venture capital, ex technology administrators bowled out credits on the internet, pre-paid debit cards, substitute credit recording and mobile lending goods that claims to take on the established banking industry and made claims of giving better service customers who are not considered a part of the financial convention, the so-called, ‘underbanked’ people of America.
Stressed consumers who are struggling to find a financial foot hold could actually be a possibly profitable market: The Center for Financial Services Innovation, a system of economic facilities and technological corporations, projected that monetarily underprivileged consumers used up roundabout 141 billion US dollars in payments and interest in the year 2015, in order to take loans, expenses, collect as savings funds and strategize by means of 28 different economic goods in the alternate services market.
Over the past years, there has been a balancing act being played by the two parties, as they fought to permit for origination while taking assurances that the ‘underbanked’ customers were not getting targeted. With the new President elect Donald Trump being the head of operations, the fintech people are seeing the balance which they had fought for so long tilting their way.
All these intricacies raise queries about the error of economic services for, ‘underbanked’ customers in the future. If the CFPB in the future, loses some of its powers or is entirely abolished, the Federal Trade Commission will arise as the leading enforcer of defilements for misleading and prejudicial practices. Needless to say, the people at the brink of desperation, getting through daily expenses using payday loans are hopeful things will change for them.