Consumer Bankers Association President and CEO Richard Hunt told the Senate Special Committee on Aging on Wednesday that deposit advance products offered by banks keep consumers from being pushed into less regulated alternatives like payday loans.
“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 in his testimony. “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 said banks have worked with regulators to ensure the products are best suited for public offering, adding that bank customers report higher 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 said.
The hearing was held to determine the impact of short-term liquidity products on consumers—senior citizens, in particular.