As told by Steve Sherman
“I called out the Obama Administration and the CFPB for their recent attack on payday lenders. And you know what, I don’t regret doing it. I’ve taken a fair amount of heat for my decision, but I believe it’s the right thing to do. While it could be seen as a political move, for me it is not a partisan thing at all. Customers of lenders like Advance Financial are getting harmed; real people who depend on the services of Advance Financial and others are getting hurt by the federal government.
We constantly hear how about how people who take payday loans enter a ‘debt-trap’, but success stories are never heard of. Many of those who seek out payday loans need to get their car fixed or want to avoid defaulting on their mortgage payment. This new rule by the CFPB, which is ironically being marketed as a protection plan, will negatively affect low and middle income people who need the services most.
It doesn’t come as a surprise that the government is against the small dollar lending industry. The reality is they think they’re fixing a problem that was never there in the first place, all at the expense of the little guy. The Administration and the CFPB sided with ‘Big Banks’ and are seeking to serve their selfish goals at the expense of the people who need these alternative sources of funds from companies like Advance Financial.
Small dollar and short term lending usually takes the form of payday loans online. These large banks don’t like it because they can’t control it. So they use their friends to legislate competition out when they should actually be trying to provide a more viable product that’s more accessible to people in need of fast funding to meet immediate needs like fixing their car or paying a medical bill.
Robert Sherrill, the author of this story, started from nothing and built a successful local cleaning business with 20 employees. He attributes his success to Advance Financial, a company which offers payday loans (now offers Flex Loans online). His success story is one of wonder. And one he believes wouldn’t be possible without assistance from Advance Financial, which approved a loan that others wouldn’t. Robert wrote in The Hill, “About ten years ago, I started a cleaning business in Nashville. As most small business owners are aware of, it’s not easy to start your own company. You don’t have a huge chunk of cash to invest and most banks don’t make loans smaller than $1000. It’s hard to get approved by these banks, but it’s impossible for people who have a past. Payday loans online were the only way to keep my business running.”
He further added, “Advance Financial saved my business and possibly my life. They kept my business afloat. The CFPB says these are expensive. I think the most expensive credit is the credit you can’t get.” He provided his testimony before Congress in February.
There is little doubt that people who apply to these lenders are at risk. But they wouldn’t be borrowing if they had another choice. The government is taking away some of the only sources of money these people have in times of need. This will just increase crime rates. There will be more broken families.
Will the ‘Big Banks’ provide short term funding when the government brings in regulation? Because if they don’t, people like Robert Sherrill will be the ones who take the greatest hit.