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Consumer Bankers Association Testifies at Senate Hearing on Short-Term Liquidity Products Hunt Emphasizes Deposit Advance Products have Strong Consumer Safeguards
Washington, D.C. (July 24, 2013) – Richard Hunt, President and CEO of the Consumer Bankers Association, testified today before a hearing of the U.S. Senate Special Committee on Aging. The hearing focused on short-term liquidity products and their impact on consumers, particularly senior citizens.
In his testimony, Hunt stated bank-offered deposit advance products play a valuable role in that they help keep consumers from being pushed out of the heavily-regulated banking system and into more expensive and often less and inconsistently regulated alternatives, such as traditional payday loans, pawn brokers, title loans and other sources of short-term, small-dollar lending. He also stated seniors are not overly represented among bank deposit advance product users relative to their population.
“Without reasonable alternatives, consumers will pay higher prices for short-term liquidity or face increased delinquency, late payment, nonsufficient fund, and returned check fees,” Hunt said. “More providers in the marketplace and efficient and consistent regulation will ensure greater competition and innovation, which ultimately will increase protections and lower costs.”
Hunt also noted banks have worked with regulators to ensure products are best suited for public offering and bank customers consistently register high satisfaction rates for deposit advance products.
“CBA urges lawmakers and regulators to give strong consideration to the possible unintended, adverse impacts on consumers when contemplating actions that would affect or eliminate the ability of banks to offer deposit advance products.”
Hunt’s full testimony may be found here.
The Consumer Bankers Association (CBA) is the trade association for today's leaders in retail banking - banking services geared toward consumers and small businesses. The nation's largest financial institutions, as well as many regional banks, are CBA corporate members, collectively holding two-thirds of the industry's total assets. CBA’s mission is to preserve and promote the retail banking industry as it strives to fulfill the financial needs of the American consumer and small business.