President Trump has proposed from the first day of his presidency to stand up for small banks, and personal loan lenders that are being bullied by the CFPB. The CFPB has forced banks to retain higher capitals. Besides, it also charges a lot of extra fees that force them to hold back in extending loans to small businesses and consumers.
President Trump has said that many people he knows have good business models but they can’t seem to find a bank that would approve their loans. According to Trump, the strict regulations that the CFPB forces banks to follow are dampening the economy by preventing the growth of small business. The future of the economy belongs to small businesses so not allowing them to get loans can result in a stagnant economy.
The CFPB has forced many payday loan lenders to review the borrowers’ risk level thoroughly before extending the loan. Failure to do so will result in them getting a fine. This has caused many payday loan shops to go out of business and close down. The CFPB accused that payday loans lenders have cheated consumers by charging exorbitant interest rates. But, payday loan lenders argued that they are providing immediate cash to help consumers to cover their emergency expenses. Without them, consumers who are short of cash will have nowhere to turn to get help.
President Trump has already ordered a review on the new rules the CFPB has imposes on the bank and personal loans lenders. Nothing has happened yet and they are still in the process of fighting the case against the CFPB. If they successfully eliminate the notorious rules of the CFPB, it will no longer be that hard to get a loan from the bank anymore.
Besides, President Trump has also recently proposed a plan that caps the monthly repayment of a student loan to no more than 12.5% of the borrower’s income. The student debt forgiveness applies to both federal and private student loan applied from personal loans lenders. Those who want to take advantage of the plan must keep up the payment for 15 years in order for the remaining balance to be forgiven. There exists a same plan under the Obama administration.
Most people on student debts are paying just 10% of their income on the monthly repayment so this means they have to keep up the same monthly repayment for 20 years before the remaining debt will be forgiven.
President Trump also wants the federal government to reduce the offering of student loans and he wants the local banks to make decisions on student loans instead. He said that the government should not be making money from student loans.