WASHINGTON—Witnesses at a House Financial Services Subcommittee on Consumer Protection and Financial Institutions hearing here offered some kudos to credit unions for offering positive alternatives for payday lending to help end debt traps in the payday and small dollar credit industries.
Rev. Dr. Frederick Douglass Haynes, III, shared his story of starting a credit union with his church to offer microloans at a 28% cap, calling it a "moral and just" business operation due to prioritizing the interest of their members.
Subcommittee Ranking Member Andy Barr (R-KY) also acknowledged that regulations like the Dodd-Frank Act have pushed small banks and credit unions out of small-dollar lending. The CFPB is currently considering changes to its 2017 payday lending rule.