New lending and credit restrictions will hurt the poor the most

Stephen Moore writes at Real Clear Markets, “Lower income Americans often live paycheck to paycheck and lack access to quick cash or credit in an emergency.

That can mean not paying the rent or going without meals or waiting for the next paycheck with only a few dollars left in the wallet.  It’s a stressful and not that uncommon a predicament.

According to the Federal Reserve, more than one out of every ten American adults cannot cover even a $400 expense by cash or credit. Nearly 30% of Americans are unbanked or underbanked.

⚠️ "#Dems further restricted access to financial services for working people and forced families to turn to more harmful options like bank overdraft fees, running up high-interest credit card debt, or borrowing against their car/home." #ampFW https://t.co/87957PTiJQ

— FreedomWorks (@FreedomWorks) December 20, 2021

This means that millions of Americans can find themselves in a financial pinch and have to rely on unsecured personal loans to help them move forward. They run up their credit cards--if they have one--or in dire circumstances, rely on old-fashioned loan sharks. That’s rarely a good option.

To provide struggling Americans with more financial security to cover expenses, the Trump administration implemented the True Lender Rule. This rule sought to give small banks and credit unions the ability to partner with third parties to provide workers with loans and quick-cash liquidity when needed. The True Lender Rule gave regulatory certainty to minority and community banks seeking to provide safe and reliable credit to underserved communities.

Earlier this year, Biden signed a joint resolution repealing that rule. In doing so, Democrats further restricted access to financial services for working people and forced families to turn to more harmful options like bank overdraft fees, running up high-interest credit card debt, or borrowing against their car or home.”

Read the entire column.