FSIC Statement in Support of H.R. 6139, the “Consumer
Credit Access, Innovation and Modernization Act”
House Financial Institutions and Consumer Credit Subcommittee
Welcomes Online Innovators to First Hearing on H.R. 6139
WASHINGTON — (July 24, 2012) Today, a national coalition of financial services innovators, policy analysts and consumer advocates expressed strong support for recently introduced legislation to create a federal non-bank charter. The Consumer Credit Access, Innovation and Modernization Act would establish a common, national standard for non-depository financial services providers who, once freed from conflicting states’ lending laws, could provide bank-like credit products to a growing number of Americans largely abandoned by traditional banks.
Mary Jackson, a Financial Services Innovation Coalition (FSIC) charter member and Senior Vice President at Cash America, reported in her testimony to members of the House Financial Institutions and Consumer Credit Subcommittee, “A federal non-bank charter, as outlined in H.R. 6139, would take the industry from struggling with 50 states to one overriding solution that meets consumer needs. The state-by-state model is utterly ineffective. We can’t offer the same choices to consumers with identical financial needs because they are separated by nothing more than a state line.”
Under H.R. 6139, financial innovators would have the opportunity to offer the types of credit products consumers need and desire such as credit cards, lines of credit, and installment loans. Equally important H.R. 6139 would help U.S. lenders who are subject to strong regulatory oversight better compete in an environment where 61 percent of the loan market is currently served by unlicensed, Internet-based, non-domestic lenders.
Financial industry analyst, G. Michael Flores, CEO of the management advisory firm Bretton Woods, Inc., testified that, “I would argue that the lack of a standard product nationally, in and of itself, creates ‘disparate impact’ on consumers. That is, nothing more than a state line can cause consumers to have to meet their specific credit needs with less than optimal and more expensive alternatives.” Flores is the author of a recent report, Serving Consumers’ Needs for Loans in the 21st Century.
Here’s a link to the complete webcast of the proceedings as well as copies of all the statements provided at today’s hearing.
The FSIC is a growing network of non-bank members who share a passion for applying emerging technology and market innovation to meet the credit needs of low- to moderate-income consumers. FSIC members urge the adoption of a cohesive set of state and federal regulatory standards that allow financial services innovators to meet the credit needs of underserved consumers.
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