Brown Hosts Consumers for Listening Session on New Financial Products
WASHINGTON, D.C. – Today, U.S. Sen. Sherrod Brown (D-OH), Chairman of the U.S. Senate Committee on Banking, Housing, and Urban Affairs, hosted a listening session with consumers from around the country. The consumers shared their experiences with new financial products, including how lack of transparency and risks undermines the dignity of work.
“Debt products that are well-designed, transparent, and regulated can help workers pay off an unexpected car repair or help with the grocery bill or cover a medical expense. But in reality, these new products often aren’t well designed, they’re rarely transparent, and they’re not well regulated,” said Brown. “That leads to more debt and more financial instability for workers who aren’t paid a living wage.”
In addition to today’s listening session, Chairman Brown will hold a Committee hearing on Tuesday, September 13th, titled “New Consumer Financial Products and the Impacts to Workers.” The hearing will be live streamed at banking.senate.gov and on YouTube.
In April, Brown led his colleagues in a letter to the Consumer Financial Protection Bureau (CFPB) urging it to investigate Training Repayment Agreement Provisions (TRAPs). In December, Brown joined his colleagues to call on the CFPB to take action regarding the governance of Buy Now, Pay Later (BNPL) products.
Excerpts from each consumer’s statement are included below. Production-quality video is linked.
“I understand and believe in personal accountability and responsibility for the choices I made, but accountability and responsibility should be a two-way street between consumers and businesses, and I urge the committee to consider how new and evolving fintech products, such as BNPL, can, whether intentional or not, harm vulnerable consumers, and trap them in debt before their lives have even started.”
“I didn’t read the agreement too closely, but what it said was that the training wasn’t free at all. It actually cost $5,000, and I’d need to pay back that $5,000 if I left within a two-year period after the beginning of the training…Over time my job at PetSmart became worse and worse, I was basically making minimum wage or just above it, but my job was impossible. I worked non-stop, through all of my breaks…I knew I could make more money working just about anywhere else, but I was terrified about that $5,500 debt. I couldn’t afford it, and I didn’t want to hurt my credit because I’m trying to build up good credit and save money. I felt completely stuck.”
“As you consider policy moving forward, I ask you to remember my patients, think of your loved ones, and to prioritize empowering and protecting the people at bedside with them by banning abusive practices like TRAPs.”
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