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Policymakers should require consumer protections for consumer and small-business loans that are underwritten using financial account data, including the following:
Financial institutions should be required to provide loan-level data while protecting consumer privacy and security to better understand lending disparities.
Credit reports and scores should be used as an underwriting tool for consumer loans. They should not be used for other purposes.
Policymakers should create a maximum floating interest rate to protect consumers against cost shifts on credit products.
Disclosures should be required to be clear, accurate, and informative so that consumers can make more meaningful card purchase and payment decisions.
Policymakers should provide additional protections for prepaid card users, including prohibiting overdraft or shortage fees. In addition, they should:
Consumer protections should be added to government benefits payments, including those made through direct deposit and prepaid cards.
Regulators should eliminate unfair, deceptive, or abusive practices in the AFS industry.
Policymakers should limit refinancing of consumer loans. They should eliminate rollovers, including taking a new loan out shortly after paying off a prior loan.