Dennis Ross Presses CFPB on Consumer Loan Reforms

From his seat on the U.S. House Financial Services Committee on Wednesday, U.S. Rep. Dennis Ross, R-Fla., pressed Consumer Financial Protection Bureau (CFPB) Director Richard Cordray on federal loan regulations.

Now there is a 17 billion-dollar business out there in consumer loans and small dollar credit, Ross said. Operation Choke Point, if it were to eliminate due to reputational risk this particular supply, if you will, the demand will remain -- what will happen to those? What will happen to those consumers who need this particular market niche?"

"What we're working on right now is potential regulations that you and I just discussed for the industry, Cordray replied. That is not consistent with wiping out the industry, it's regulations to make sure that the industry is working in a pro-consumer fashion. That's our intent. I have recognized and acknowledged that demand for small dollar credit. People have that demand."

"And if they don't have it in a regulated fashion they're going to get it in a black market fashion, in a way that is more harmful to the consumer," Ross said.

"I agree with you on that," Cordray replied.