Obama warns against payday loan amendments

US PRESIDENT Barack Obama said yesterday he would not support amendments made by the Republicans to the Financial Reform Bill that would “gut” and “weaken” consumer protection.

During a Congressional debate on financial regulatory reform, Obama said amendments proposed by the Republicans would gut consumer protections and include “dangerous carve outs for payday lenders”.

He said: “I will not allow amendments like this one written by Wall Street’s lobbyists to pass for reform.”

The amendment, which was proposed by Republican Senator Richard Shelby, surrounds the issue of payday loans, which are designed to carry a borrower over until they get their salary.

The Republicans want to create a consumer protection division within the Federal Deposit Insurance Corporation that would oversee such loans and would exempt the regulation of non-banking institutions.

Obama’s administration is rallying for overall regulation of the loans.