79–006 

115TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 2d Session 115–890 

ENSURING QUALITY UNBIASED ACCESS TO LOANS ACT 

OF 2018 

AUGUST 3, 2018.—Committed to the Committee of the Whole House on the State 

of the Union and ordered to be printed 

Mr. HENSARLING, from the Committee on Financial Services, 

submitted the following 

R E P O R T 

together with 

MINORITY VIEWS 

[To accompany H.R. 4861] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on Financial Services, to whom was referred the 

bill (H.R. 4861) to nullify certain guidance on deposit advance products, to require the Federal banking agencies to establish standards for short-term, small-dollar loans made by insured depository 

institutions, to exempt insured depository institutions and insured 

credit unions from the payday lending rule of the Bureau of Consumer Financial Protection, and for other purposes, having considered the same, report favorably thereon without amendment and 

recommend that the bill do pass. 

PURPOSE AND SUMMARY

Introduced by Representative Trey Hollingsworth on November 

16, 2017, H.R. 4861, the ‘‘Ensuring Quality Unbiased Access to 

Loans Act of 2018’’ would repeal the Federal Deposit Insurance 

Corporation’s (FDIC) ‘‘Guidance on Supervisory Concerns and Expectations Regarding Deposit Advance Products’’ (78 Fed. Reg. 

70552; November 26, 2013). The bill would also require each Federal banking agency to issue regulations, subject to notice and comment, to establish standards for short-term, small-dollar loans or 

lines of credit made available by insured depository institutions. 

2 

1https://s3.amazonaws.com/cfsi-innovation-files/wp-content/uploads/2017/01/31163518/A-Complex-Portrait-An-Examination-of-Small-Dollar-Credit-Consumers.pdf. 2https://www.fdic.gov/news/news/press/2013/pr13105a.pdf. 

BACKGROUND AND NEED FOR LEGISLATION

As early as 1995, many financial institutions offered small dollar 

loans to customers as an alternative to other short-term lending 

products known as ‘‘deposit advance products.’’ These loans were 

typically only available to existing customers with direct deposit 

and provided a short term line of credit for the customer. Institutions offering the product charged a fee in terms of dollars per 

amount advanced and included limits on advances. The outstanding balance is repaid from the consumers direct deposits; 

however, the financial institution could offer the consumer an extended repayment plan. Many of these products included ‘‘cooling 

off’’ periods that prohibited consumers from accessing another deposit advance. 

In 2012 the Center for Financial Services Innovation conducted 

a survey of consumer’s use of small dollar credit products, including deposit advance.1 This survey found that 53% of respondents 

would use deposit advance again without hesitation, and overall 

90% of respondents rated their satisfaction with the product as 3 

or higher (based on a scale of 1 to 5). Furthermore, the survey 

found that the costs of deposit advance products were least likely 

to exceed consumers’ expectations compared to other small dollar 

credit products. 

On November 21, 2013, the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency 

(OCC) issued final guidance to financial institutions that offered 

deposit advance products.2 The guidance includes the following requirements: 

• For the bank to be able to evaluate a customer’s deposit advance eligibility, the customer must have had a deposit account 

with the bank for at least six months. 

• Customers with any delinquent or adversely classified credits 

should be ineligible. 

• The bank should analyze the customer’s financial capability, 

giving consideration to the customer’s ability to repay a loan without needing to borrow repeatedly from any source, including re-borrowing, to meet necessary expenses. 

• Each deposit advance loan should be repaid in full before a 

subsequent loan is made, banks should not offer more than one 

loan per monthly statement cycle, and a cooling-off period of at 

least one monthly statement after repayment of a loan should be 

completed before another loan is made. We read these requirements to effectively impose a limit of six deposit advances per year. 

• A customer’s deposit advance credit limit should not be increased without a full underwriting assessment and any increase 

should not be automatic but should be initiated by a customer’s request. 

• The bank should reevaluate the customer’s eligibility and capacity for the product no less often than every six months and identify risk that could negatively affect the customer’s eligibility, such 

as repeated overdrafts. 

3 

3https://www.occ.treas.gov/news-issuances/news-releases/2013/nr-occ-2013-182.html. 

4https://www.occ.treas.gov/news-issuances/news-releases/2017/nr-occ-2017-118.html. 

Although the guidance from the respective banking agencies does 

not specifically ban deposit advance products, its effect on banks 

makes it impossible to continue offering these products on a largescale basis, if at all. This is accomplished by asserting that certain 

risks are associated with the products including credit, reputation, 

operational, and compliance risk. In a press statement announcing 

the release of the guidance, then Comptroller Thomas Curry stated: 

‘‘The OCC encourages banks to offer responsible products 

that meet the small-dollar credit needs of customers . . . 

However, deposit advance products share a number of 

characteristics with traditional payday loans, including 

high fees, short repayment periods, and inadequate attention to the ability to repay. As such, these products can 

trap customers in a cycle of high-cost debt that they are 

unable to repay. As a result, they pose significant safety 

and soundness and consumer protection risks. Banks must 

understand and manage those risks, and this guidance 

clarifies our expectations for doing so.’’ 3

As a result of the 2013 guidance, financial institutions that previously chose to offer deposit advance products discontinued doing 

so, to the extent that only one FDIC-insured institution currently 

offers a deposit advance product. 

Despite effectively banning deposit advance products by disincentivizing banks to offer them, the demand remains, and in 

many cases will only intensify in the wake of the Bureau of Consumer Financial Protection (BCFP) issuing a Final Rule to regulate 

short-term small-dollar loans. The BCFP rule, released on October 

5, 2017, affects loans where the consumer must substantially repay 

within 45 days, in large lumps, or any loan where the cost of credit 

exceeds 36 percent per year (effectively applying an inappropriate 

Annual Percentage Rate calculation to loans that are intended to 

be held for only a short period). 

The same day the BCFP released its final rule, then-Acting 

Comptroller Keith Noreika rescinded the OCC guidance on deposit 

advance products. According to Mr. Noreika: 

The continuation of the OCC’s guidance would subject national banks and federal savings associations to potentially 

inconsistent regulatory direction and undue burden as 

they prepare to implement the requirements of the CFPB’s 

final rule. Moreover, in the years since the agency issued 

the guidance, it has become clear to me that it has become 

difficult for banks to serve consumers’ need for short-term, 

small-dollar credit. As a result, consumers who would rely 

on highly regulated banks and thrifts for these legitimate 

and well-regulated products to meet their financial needs 

turn to other, lesser regulated entities, which may result 

in consumer harm and expense. In ways, the guidance 

may even hurt the very consumers it is intended to help, 

the most marginalized, unbanked and underbanked portions of our society.’’ 4

4 

A result of the heavy federal regulation of the short-term, small 

dollar credit is the potential elimination of the entire marketplace, 

leaving consumers experiencing financial emergencies with no safe 

options for short-term, small-dollar credit. By repealing the FDIC 

guidance, and requiring future regulation to be transparently evaluated and coordinated between banking regulators, banks will have 

the legal and regulatory certainty to re-enter the marketplace and 

re-introduce these products, which will give consumers more credit 

options from which to choose in an emergency. 

HEARINGS

The Subcommittee on Financial Institutions held a hearing examining matters relating to H.R. 4861 on July 12, 2017. 

COMMITTEE CONSIDERATION

The Committee on Financial Services met in open session on 

March 21, 2018 and ordered H.R. 4861 to be reported favorably to 

the House without amendment by a recorded vote of 34 yeas to 26 

nays (recorded vote no. FC–167), a quorum being present. 

COMMITTEE VOTES

Clause 3(b) of rule XIII of the Rules of the House of Representatives requires the Committee to list the record votes on the motion 

to report legislation and amendments thereto. A recorded vote was 

taken on an amendment offered by Rep. Ellison. The amendment 

was not agreed to by a vote of 26 yeas to 33 nays (Record vote no. 

FC–166). A recorded vote was taken on a motion by Chairman 

Hensarling to report the bill favorably to the House without 

amendment. The motion was agreed to by a recorded vote of 34 

yeas to 26 nays (Record vote no. FC–167), a quorum being present. 

5 


Insert offset folio 6 here HR890.001

Mr. 

Mr. McHenry X X 

Mr. King ~ ~ 

Mr. Royce (CA) X ~ 

Mr. Lucas X ~ 

Mr. X X 

Mr. Posey X Clay _ 

Luetkemeyer X Mr. Lynch 

Mr. Hurzenga Mr. David Scott (GA) 

Mr. Duffy_ X Mr. AI Green (fX) ~ 

Mr. Stivers ~ Mr. Cleaver X 

Mr. Hultgren Ms. Moore 

Mr. Russ X Mr. 

Mr. X X 

Mrs. Wagner _ X 

Mr. Barr X 

Mr. Rothtus X Mr. Kildee 

Mr. X Mr. Delaney 

Tipton Ms. X 

Mr. Willrams ~ Mrs. Beatty X 

Mr. Poliquin X Mr. Heck X 

Mrs. Love x Mr. Vargas 

Mr. Hill x Mr. Gottheimer 

Mr. Emmer X Mr. Gonzalez (TX) 

Mr. Zeldin X Mr. Crist X 

Mr. X Mr. Kilwen 

X 

Mr. Mooney 

Mr. MacArthur x 

Mr. Davrdson 

Mr. Budd 

Mr. 
6 


Insert offset folio 7 here HR890.002

~ Mr. Sherman ~ 

Mr. lucas X Mr. Meeks X 

~ Mr. Capuano X 

X Mr. Clay 

X Mr. lynch 

Mr. Huizenga X Mr. David Scott (GAl X 

Mr. Duffy X X 

Mr. Stivers ~ X 

Mr. Hultgren Moore X 

Mr. Ross Mr. Ellison 

Mr. Pittenger X Mr. Perlmutter X 

Mrs. Wagner Mr. Himes X 

Mr. Barr X Mr. Foster X 

Mr. Rothfus Mr. Kildee X 

Mr. X X 

Mr. Tipton X 

Mr. Williams X Mrs. X 

Mr. Poliquin Mr. Heck X 

X Mr. Vargas X 

X 

X X 

X 

Mr. Trott Mr. Krhuen 

Mr. l oudermilk X 

X 

X 

X 

Ms. Tenney X 

Mr 
7 

COMMITTEE OVERSIGHT FINDINGS

Pursuant to clause 3(c)(1) of rule XIII of the Rules of the House 

of Representatives, the findings and recommendations of the Committee based on oversight activities under clause 2(b)(1) of rule X 

of the Rules of the House of Representatives, are incorporated in 

the descriptive portions of this report. 

PERFORMANCE GOALS AND OBJECTIVES

Pursuant to clause 3(c)(4) of rule XIII of the Rules of the House 

of Representatives, the Committee states that H.R. 4861 will repeal 

the FDIC’s guidance on Deposit Advance Products which will allow 

customers who might not qualify for traditional credit products 

such as credit cards and lines of credit to have access to deposit 

advance products as an additional funding option, from financial 

institutions which they have an established relationships at. 

NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX

EXPENDITURES

In compliance with clause 3(c)(2) of rule XIII of the Rules of the 

House of Representatives, the Committee adopts as its own the estimate of new budget authority, entitlement authority, or tax expenditures or revenues contained in the cost estimate prepared by 

the Director of the Congressional Budget Office pursuant to section 

402 of the Congressional Budget Act of 1974. 

CONGRESSIONAL BUDGET OFFICE ESTIMATES

Pursuant to clause 3(c)(3) of rule XIII of the Rules of the House 

of Representatives, the following is the cost estimate provided by 

the Congressional Budget Office pursuant to section 402 of the 

Congressional Budget Act of 1974: 

U.S. CONGRESS, CONGRESSIONAL BUDGET OFFICE, Washington, DC, June 20, 2018. 

Hon. JEB HENSARLING, 

Chairman, Committee on Financial Services, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 4861, the EQUAL Act of 

2018. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contacts are Sarah Puro and Stephen Rabent. 

Sincerely, 

KEITH HALL, 

Director. 

Enclosure. 

H.R. 4861—EQUAL Act of 2018 

H.R. 4861 would nullify guidance issued in 2013 by three financial regulators—the Office of the Comptroller of the Currency 

(OCC), the Federal Deposit Insurance Corporation (FDIC), and the 

Federal Reserve—about certain short-term loans, known as deposit 

8 

advance products, that banks offer to their customers. The bill also 

would require the Consumer Financial Protection Bureau (CFPB) 

to alter some current regulations. 

CBO estimates that those financial regulators and the CFPB 

would need a total of three to five employees for about a year, with 

an average annual compensation of $250,000 each, to complete the 

rulemaking required by the bill regarding deposit advance products. 

CBO expects that enacting the bill would not change the risk 

that a federally insured financial institution would fail because we 

estimate that the size of the deposit advance market would continue to be small under H.R. 4861. In 2013, deposit advance products amounted to less than 0.05 percent of the assets held by 

banks, and the loss rate of about 5 percent on those products was 

similar to that for other unsecured credit. Also, for the roughly 900 

banks regulated by the OCC, H.R. 4861 would have no effect on 

their operations because the OCC has already rescinded the 2013 

guidance on deposit advance products. 

CBO estimates enacting the bill would increase the deficit by $1 

million over the 2019–2028 period; therefore, pay-as-you-go procedures apply. That increase comprises increased direct spending by 

the FDIC and the CFPB and decreased revenues from the Federal 

Reserve. 

CBO estimates that enacting H.R. 4861 would not significantly 

increase net direct spending or on-budget deficits in any of the four 

consecutive 10-year periods beginning in 2029. 

H.R. 4861 would preempt state laws and regulations that govern 

bank’s short-term lending when those laws conflict with federal 

regulations issued under the bill. Although the preemption would 

limit the application of state laws and regulations, CBO estimates 

that H.R. 4861 would impose no duty on state, local, or tribal governments that would result in additional spending or a loss of revenues. Consequently, the cost would not exceed the threshold established in the Unfunded Mandates Reform Act (UMRA) for intergovernmental mandates ($80 million in 2018, adjusted annually for inflation). 

CBO expects the FDIC and OCC would increase fees or premiums to offset the costs of rulemaking activities required by the 

bill. Therefore, H.R. 4861 would increase the costs of an existing 

mandate on private entities required to pay those fees. However, 

CBO estimates that the incremental cost of the mandate would fall 

well below the annual threshold established in UMRA for privatesector mandates ($160 million in 2018, adjusted annually for inflation). 

The CBO staff contacts for this estimate are Sarah Puro and Stephen Rabent (for federal costs) and Jon Sperl (for mandates). The 

estimate was reviewed by H. Samuel Papenfuss, Deputy Assistant 

Director for Budget Analysis. 

FEDERAL MANDATES STATEMENT

This information is provided in accordance with section 423 of 

the Unfunded Mandates Reform Act of 1995. 

The Committee has determined that the bill does not contain 

Federal mandates on the private sector. The Committee has deterVerDate Sep 11 2014 05:46 Aug 07, 2018 Jkt 079006 PO 00000 Frm 00008 Fmt 6659 Sfmt 6602 E:\HR\OC\HR890.XXX HR890
9 

mined that the bill does not impose a Federal intergovernmental 

mandate on State, local, or tribal governments. 

ADVISORY COMMITTEE STATEMENT

No advisory committees within the meaning of section 5(b) of the 

Federal Advisory Committee Act were created by this legislation. 

APPLICABILITY TO LEGISLATIVE BRANCH

The Committee finds that the legislation does not relate to the 

terms and conditions of employment or access to public services or 

accommodations within the meaning of the section 102(b)(3) of the 

Congressional Accountability Act. 

EARMARK IDENTIFICATION

With respect to clause 9 of rule XXI of the Rules of the House 

of Representatives, the Committee has carefully reviewed the provisions of the bill and states that the provisions of the bill do not 

contain any congressional earmarks, limited tax benefits, or limited 

tariff benefits within the meaning of the rule. 

DUPLICATION OF FEDERAL PROGRAMS

In compliance with clause 3(c)(5) of rule XIII of the Rules of the 

House of Representatives, the Committee states that no provision 

of the bill establishes or reauthorizes: (1) a program of the Federal 

Government known to be duplicative of another Federal program; 

(2) a program included in any report from the Government Accountability Office to Congress pursuant to section 21 of Public 

Law 111–139; or (3) a program related to a program identified in 

the most recent Catalog of Federal Domestic Assistance, published 

pursuant to the Federal Program Information Act (Pub. L. No. 95– 

220, as amended by Pub. L. No. 98–169). 

DISCLOSURE OF DIRECTED RULEMAKING

Pursuant to section 3(i) of H. Res. 5, (115th Congress), the following statement is made concerning directed rule makings: The 

Committee estimates that the bill requires no directed rule makings within the meaning of such section. 

SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION

Section 1. Short title 

This section cites H.R. 4861 as the ‘‘Ensuring Quality Unbiased 

Access to Loans Act of 2018’’. 

Section 2. Nullification of, and requirements for, guidance on deposit advance products 

This section nullifies the final guidance from the Federal Deposit 

Insurance Corporation titled ‘‘Guidance on Supervisory Concerns 

10 and Expectations Regarding Deposit Advance Products’’ 11 (78 

Fed. Reg. 70552; November 26, 2013). 

Section 3. Short-term, small dollar loans 

This section states that no later than 24 months after the date 

of the enactment of this Act, the Federal banking agencies shall 

10 

each issue regulations that supersede any State law that sets 

standards for short-term small-dollar loans, and after providing for 

public notice and comment, to establish standards for short-term, 

small-dollar loans or lines of credit made available by insured depository institutions. 

Section 4. Exemption from payday rule 

This section states that the BCFP’s final ‘‘Payday, Vehicle Title, 

and Certain High-Cost Installment Loans’’ (published at 82 Fed. 

Reg. 54472; November 17, 2017) shall not apply to a loan made by 

an insured depository institution on or after the date that the appropriate Federal banking agencies issues such regulation. 

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows: H.R. 4861 does not repeal or 

amend any section of a statute. Therefore, the Office of Legislative 

Counsel did not prepare the report contemplated by Clause 

3(e)(1)(B) of rule XIII of the House of Representatives. 

(11) 

1https://files.consumerfinance.goy/f/201403_cfpb_report_payday-lending.pdf 2https://files.consumerfinance.goy/f/201403_cfpb_report_payday-lending.pdf 3http://www.pewtrusts.org//media/legacy/uploadedfiles/pcs_assets/2012/ 

pewpaydaylendingreportpdf.pdf 4http://www.responsiblelending.org/sites/default/files/nodes/files/research-publication/predatory-profiling.pdf 5https://www.washingtonpost.com/business/economy/wells-fargo-us-bank-to-end-payday-loansciting-tougher-regulation/2014/01/17/b65f0512-7f82-11e3-93c1- 

0e888170b723_story.html?utm_term=.e2aa419e0185 

MINORITY VIEWS 

H.R. 4861 would allow banks to offer payday loans, a practice 

which has essentially been banned by banking regulators for 5 

years. The bill would overturn five years of sound guidance from 

regulators and allow Federally-insured banks to offer exploitative 

deposit advance products, which are essentially payday loans made 

by banks. The bill would also direct the Federal banking agencies 

to conduct rulemaking and establish standards for these kinds of 

bank-issued payday loans without the participation of the Consumer Financial Protection Bureau (‘‘Consumer Bureau’’). The bill 

would also exempt payday loans made by insured depository institutions or credit unions from the Consumer Bureau’s 2017 ‘‘Payday, Vehicle Title, and Certain High-Cost Installment Loans’’ final 

rule (‘‘payday rule’’). Finally, the bill preempts State-level consumer protection laws. 

Payday loans are notorious for trapping borrowers in a cycle of 

debt. In 2014, the Consumer Bureau found in a study that the payday lender business model often relies on borrowers needing to refinance existing loans, and the average payday loan customer takes 

out 10 loans per year and spends 11 months in payday loan debt.1

Eighty percent of all payday loans are the result of ‘‘rollover’’ or reborrowing, which is the practice of taking out a new payday loan 

before (or soon after) the old one is paid back.2 In other words, the 

borrower could not afford the loan in the first place. According to 

a 2012 study from The Pew Charitable Trusts, payday loan borrowers disproportionately come from low-income households and 

those headed by minorities and single women.3 This is no coincidence, as a study released by the Center for Responsible lending 

that same year shows payday loan companies actively target minorities by placing branches in African-American and Latino communities.4

The idea that insured depository institutions would, if presented 

with the opportunity, only offer affordable payday loan products is 

misguided, and has been disproven by history. Prior to 2013, some 

banks—such as Wells Fargo, Regions, Fifth Third, US Bank, Bank 

of Oklahoma, and Guaranty Bank—were making 300%-plus interest rate loans, which they called ‘‘deposit advance’’ products, but 

that functioned identically to non-bank payday loans.5

Deposit advance products are small-dollar, short-term loans that 

banks make available to customers with direct deposit. The cusVerDate Sep 11 2014 05:46 Aug 07, 2018 Jkt 079006 PO 00000 Frm 00011 Fmt 6604 Sfmt 6604 E:\HR\OC\HR890.XXX HR890
12 

6https://www.occ.goy/news-issuances/news-releases/2013/nr-ia-2013-182a.pdf 

7 Robert Benincasa, Banks Come Under Fire for Filling in the Payday Loan Gap, NPR (Dec. 

5, 2013), https://www.npr.org/2013/12/05/247182721/banks-fill-in-the-payday-loan-gap. 8https://www.aging.senate.gov/press-releases/hearing-to-examine-the-impact-of-payday-lending-on-seniors 9 Chris Morran, Wells Fargo Customer Explains How $500 Loan Resulted In $3,000 Fees, 

Consumerist (July 26, 2013), https://consumerist.com/2013/07/26/wells-fargo-customer-explainshow-500-loan-resulted-in-3000-in-fees/. 10https://www.fdic.gov/news/news/press/2013/pr13105a.pdf 11https://www.occ.gov/news-issuances/news-releases/2013/nr-ia-2013-182a.pdf 12https://www.federalreserve.gov/supervisionreg/caletters/caltr1307.htm 

tomer is allowed to take out a loan, which is to be repaid from the 

proceeds of the next direct deposit. These loans typically have high 

fees, are repaid in a lump sum in advance of the customer’s other 

bills, and often do not utilize prudent banking practices to determine the customer’s ability to repay the loan and meet other necessary financial obligations.6 These bank-issued deposit advance 

products often operated as debt traps, with borrowers refinancing 

their payday loans multiple times and accumulating thousands of 

dollars in associated fees.7

For example, in a 2013 hearing on payday loans and older Americans with the Senate Special Committee on Aging,8 a 69-year-old California woman testified about how she ended up paying $3,000 

in fees on a $500 deposit advance loan she took out with Wells 

Fargo.9 In 2013, in response to Congressional outcry against highcost, bank-issued deposit advance loans, the Federal Deposit Insurance Corporation (‘‘FDIC’’) 10 issued guidance aimed at curbing the 

harms of the more predatory deposit advance products being offered by banks. At the same time, the Federal Reserve and Office 

of the Comptroller of the Currency (‘‘OCC’’) 11 issued similar supervisory statements to the same effect.12 H.R. 4861 would repeal this 

guidance. 

H.R. 4861 would also direct the Federal banking agencies to coordinate and issue regulations, within 24 months, establishing 

standards for the offering of short-term, small-dollar loans or lines 

of credit by insured depository institutions. This would create a 

two-year gap where no regulatory guidance is in place for payday 

loans offered by certain banks. Furthermore, the National Credit 

Union Administration (‘‘NCUA’’) and the Consumer Bureau are 

inexplicably left out of the rulemaking process, even though the bill 

would exempt loans offered by credit unions from the Consumer 

Bureau’s final payday rule. 

The Consumer Bureau’s payday rule provides important, common-sense protections for payday loans, auto title loans, deposit advance products, and other longer term loans with balloon payments. Under the rule, lenders must conduct ability-to-repay analyses to determine whether a borrower can actually repay the full 

amount of the loan without re-borrowing. The rule also imposes requirements concerning lender withdrawal practices, disclosures, 

and recordkeeping. 

Prior to the creation of the Consumer Bureau in the Dodd-Frank 

Wall Street Reform and Consumer Protection Act, Federal banking 

agencies were tasked with the dual, and frequently incompatible, 

responsibilities of supervising financial institutions for safety and 

soundness as well as for compliance with consumer protection laws. 

This inherent regulatory conflict often resulted in financial instituVerDate Sep 11 2014 05:46 Aug 07, 2018 Jkt 079006 PO 00000 Frm 00012 Fmt 6604 Sfmt 6604 E:\HR\OC\HR890.XXX HR890
13 

13http://www.responsiblelending.org/sites/default/files/nodes/files/research-publication/crlshark-free-waters-aug2016.pdf 14http://www.responsiblelending.org/sites/default/files/nodes/files/research-publication/crlshark-free-waters-aug2016.pdf 

tions’ attention to consumer protections taking a subordinate role 

to safety and soundness concerns. As a result, Congress designed 

the Consumer Bureau with a primary mission to protect consumers. H.R. 4861 inappropriately weakens the Consumer Bureau’s payday rule and places primary oversight for payday loans 

with the Federal banking agencies, in contravention of Congress’s 

clear intent to vest primary consumer protection and oversight responsibilities with the Consumer Bureau. 

H.R. 4861’s preemption of State laws on payday loans would 

cause states to lose their current authority over abusive products 

by the banks that they charter and regulate. Fifteen States and the 

District of Columbia have enacted double-digit interest rate caps, 

which are effectively payday loan bans,13 and since 2005, no State 

has authorized high-cost payday loans. According to the Center for 

Responsible Lending, State-level payday loan bans save consumers 

more than $2.2 billion annually in fees that would otherwise be 

paid to payday lenders.14 It would be irresponsible for Congress to 

subvert these States by repealing their authority to enact and enforce strong consumer protections. 

While Congress must continue to seek solutions that address access to credit, this bill is not the answer. For these reasons, we oppose H.R. 4861. 

MAXINE WATERS. 

MICHAEL E. CAPUANO. 

AL GREEN. 

CAROLYN B. MALONEY. 

NYDIA M. VELA ́ ZQUEZ. 

DENNY HECK. 

Æ