LOS ANGELES, June 22 /PRNewswire/ -- AboutPaydayLoan.com - Currently there is a battle taking place in Washington, D.C. over a new financial reform bill, which aims to "clean up" the economic mess left over from the wake of our subprime mortgage collapse and to also prevent a second economic crisis. At least that's what we are being told by Senators such as Chris Dodd (D. Connecticut) who are heading up this recent push for financial reform.
According to Senator Dodd, this financial reform bill is necessary to prevent another economic crisis, as well as to protect consumers from confusing and misleading financial jargon when dealing with products that offer even short-term consumer finance. If approved, Senator Dodd aims to create a powerful new agency to oversee these new financial regulations, the Consumer Financial Protection Agency (CFPA) which would be a stand-alone government agency with a vast reach of power to regulate consumer financial products from auto-loans to local furniture stores that offer in-house finance options. Many are pushing for the CFPA to be housed under the existing Treasury office, as to help curb the seemingly endless breadth of reach that the stand-alone CFPA would wield if given the opportunity to stand outside of the Treasury department.
Although many of our Senators are pushing this financial regulation as the only logical means to preventing another economic crisis, there are many skeptics who feel otherwise and claim that stricter financial regulations may in fact harm our economy more than it will help in the long run. One reason for this is the potential for thousands of job-losses due to these new stricter regulations. Many small businesses, such as your family dentist or even a local used car sales lot, who offer simple "in-house" ("in-house" meaning that the customer can apply for financing from an outsourced lender while still in the dentist's office, auto sales lot, etc.) financing options will potentially face new confusing, and more strict financial regulations.
Even small loans such as a payday loan, offered by experienced and responsible direct payday lenders such as Pay1day.com, will possibly fall under the new regulations. Many economists predict that eliminating consumer short-term credit options will actually harm the economy, as shows in reports from states that have banned payday lending in past years.
Many businesses are already reporting that they will be forced to simply abandon these finance options, rather than bear the increased legal fees and more that they would face in order to keep their financing options available and stay current with the legal changes to contracts and more. And by eliminating these finance options, which help drive sales and make purchases possible for lower-income working families, many predict massive job losses to several industries in the backlash of this new legislations. Most of these industries also had absolutely nothing to do with our current economic crisis yet face the reality of strict new enforcements to their industry, but consumer demand for credit options will not change regardless.