SAFE Lending Act of 2024 Stopping Abuse and Fraud in Electronic Lending Act of 2024
The bill establishes a registration requirement for lenders engaging in small-dollar consumer credit transactions. This provision is designed to increase transparency in lending and improve consumer rights when interacting with financial institutions. Additionally, the legislation outlines specific consumer protections regarding electronic fund transfers, ensuring that consumers’ consent is explicitly obtained before any electronic transaction can take place. By doing this, the bill aims to align consumer protection laws with modern financial practices, significantly affecting how financial transactions are recorded and managed in the electronic domain.
HB9679, titled the 'SAFE Lending Act of 2024' or the 'Stopping Abuse and Fraud in Electronic Lending Act of 2024', aims to amend the Truth in Lending Act to enhance protection for consumers engaging in small-dollar lending transactions. The bill introduces new provisions to regulate the practices surrounding extensions of consumer credit, particularly focusing on electronic lending methods. It aims to prohibit unauthorized creation of checks and enforce consumer control over their bank accounts, thereby providing greater safeguards against fraud and abuse in the lending process.
Notably, the bill includes a prohibition on lead generation for small-dollar loans, which could be contentious for certain financial service providers. Proponents argue that restricting third-party lead generation is essential for protecting sensitive personal information and minimizing predatory lending practices. However, opponents may view this as a limitation on the ability of marketers to connect consumers with financial products, arguing it could stifle competition and reduce access to credit for consumers looking for small specific loans.