IFL President "Calls Out" CFPB Chair

Langer Testifies at CFPB Field Hearing In Nashville

Published Tuesday, March 25, 2014
by Andrew Langer
March 25, 2014
Contact: media@instituteforliberty.org

Institute for Liberty Calls out CFPB Director Cordray

Washington, D.C. – The following statement was prepared for delivery today by Institute for Liberty (IFL) President Andrew Langer at the Consumer Financial Protection Bureau (CFPB) field hearing in Nashville, TN:

"CFPB Director Richard Cordray and Members of the Panel:
Thank you for the opportunity to speak today.  My name is Andrew Langer, and I am President of the Institute for Liberty, a non-profit advocacy organization based in Washington, D.C.  We focus on executive branch regulatory policy, and the impact of the regulatory state on business in America.

I have to say, I am deeply concerned with Director Cordray’s remarks.  Not so much for what you said, Director, but by what you didn’t say.  For instance, I take issue with what you and other panelists have said, raising concerns about the potential interest payments on so-called 'payday loans.'  This is misleading—since such situations aren't limited to payday loans.  A family that takes out a 30 year $100,000 mortgage at a 4% APR will ultimately pay nearly $200,000 in interest over time.  This is not a public policy problem, however, and it should not be. The assessment of the riskiness of a loan is something that only a marketplace can really determine. The riskier the loan, the higher the terms. We cannot and should not be creating policies to eliminate risk.
But were your remarks to be taken at face value, one would think that this Administration were merely interested in fixing problems existing in the short-term, small-value, high-risk loan industry.  But what you failed to mention is the ongoing effort by this Administration to essentially destroy this industry through efforts like Operation Choke Point, whose literal goal is to 'choke off' the access to capital and payments necessary for this industrya thriving and vital sector of the economy—to survive.

The idea that this Administration wants to destroy this free market private industry, replacing it with a combination of postal lending (yes, your local post office would become your neighborhood lender) and community activist lending institutions should raise serious concerns.  Right now, businesses are footing the bill for their losses.  The Administration wants to put American taxpayers on the hook for what could potentially be billions of dollars in defaults.  This is an incredibly bad idea. Essentially, we're looking at a 19th century institution to solve a 21st Century problem; this defies common sense."

IFL is an aggressive defender of the rights of individuals to pursue the American dream. They inject the perspective of small businesses, and the working families that depend on them, into the public policy debate. For more, please visit: instituteforliberty.org.