Robert Sherrill used to sell drugs. He got arrested, and paid his debt to society. When Robert was released from prison, he tried to find a job. However, for someone with a felony on his record, finding a decent job is almost impossible. Robert decided that what he needed to do was become an entrepreneur and create his own job.
Robert needed a small amount of help to get his fledgling business off of the ground. First, he turned to banks and other ‘traditional’ loan sources, but was denied. He couldn’t get the money from friends, relatives, or faith based organizations.
Robert had two choices. Go back to the streets for the money, or take out a loan with a payday lender–the only lawful entity that would take a chance on him.
In March, the Consumer Financial Protection Bureau is expected to release a proposal of new regulations that will adversely impact payday loan companies.
Robert Sherrill recently traveled to Washington, D.C. to share his thoughts on those new regulations to the Financial Services Committee.
While testifying on Capitol Hill, Sherill was asked: “What would have happened if you couldn’t have got a payday loan?”
“I would probably be in jail,” said Sherill. “I didn’t have any options. It’s different when you have options.”
If he hadn’t gotten money from Advance Financial he said that, “I would have maybe had to go back to the streets because that’s what I knew; and I knew I could get it that way. But I was trying to change my life. I knew that wasn’t the way I wanted to go.”
When asked if he considered payday loans hazardous, Sherill responded “No, because no one is producing a better alternative.”
“The payday loan I got was a lifeline, it enabled me to start a business.”
The changes that the CFPB is proposing will effectively shutdown small dollar lenders, cutting off payday loans to the roughly 51 million American consumers who are unbanked or under-banked; preventing them from accessing what may be the only type of credit available to them.
Commissioner Greg Gonzales of the Tennessee Department of Financial Institutions commented on the short-term lending rules proposal by the Consumer Financial Protection Bureau. Gonzales warns Tennessee legislators that the proposed rules will force consumers to underground and unregulated lenders.
“The CFPB in Washington is in the process of developing a notice of proposed rules to address payday lending and other similar products,” said Gonzales. “The economic impact on such rules appears to indicate that a majority of these effected industries might be eliminated once the rules are implemented.”
“Should that occur we do have a concern that thousand of Tennesseans may no longer have access to credit; while some might argue that such a result might be good, we certainly believe that consumers who feel they must find credit will find it, even if they must go to unregulated lenders.”
Sherill agrees, “I can say that there are other places that I could have gone for a loan, you don’t want me to tell you about those places or those people–but they are out there.”
Robert Sherrill was able to turn his payday loan into a thriving janitorial services business, employing more than 20 people.
“I’m a now a Minority Certified Company with the Governor’s Office of Diversity,” he said. “I’m with the Better Business Bureau, and a member of the Nashville Chamber of Commerce. I started my company from the ground up due to loans from these type of businesses. It works for me.”
