Lalita Clozel
speaker
117 appearances
3 recordings
1 series
first heard Mar 2018
last heard Sep 2019
Lalita Clozel’s voice in public audio — every appearance, attributed to the second.
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Appearances
They're working on some other guidelines.
But ultimately, the banks feel like they would need more of an assurance that regulators are not going to change their mind again, possibly in the next administration.
And then, you know, they would end up being on the hook for those loans that they've started making and they might be in trouble because of them.
So the banks are just worried that things might change again and they want a really strong guarantee that if they do enter the space again, they're not going to get backlash over it.
What you don't want is to have borrowers taking out loans that they can't repay.
And if they can't repay the loans, they'll take out another loan to cover that loan.
And then they'll end up in a cycle of debt.
And for some consumer groups, it doesn't matter if it's the payday lender making that loan or a bank making that loan.
If the interest rate is too high, there's too much of a risk that borrowers end up in a cycle of debt.
And you'd want to make sure that the standards are very stringent and limit those types of loans as much as possible.
Small dollar short-term loans tend to be high interest no matter who does it because it's a low profit, low margin business.
Banks typically offer lower interest rate loans than payday lenders.
And there are other players as well.
I think a lot of the short-term loans are migrating towards a more of an installment lending model, which is not a you pay everything all at one time when you get your paycheck, but it's usually you pay within a few months.
So it's a slightly different type of model.
And those two things are offered both by banks and non-banks.
Banks have an advantage, however, because a lot of national banks can be exempt from state interest rate laws.
So that in states that ban payday lending or that ban certain levels of interest rates, the banks don't necessarily have to comply with those, even though they are subject to oversight by banks.
federal regulators, and as we've discussed, that sometimes can create limitations in what kinds of loans they can offer.
Nobody wants to be known as a payday lender because that comes with a lot of notions about predatory lending and consumer abuses and offering loans at very high interest rate and keeping consumers in a cycle of debt.
Showing 21–40 of 117 · page 2 of 6
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