The American Fintech Council (AFC) has submitted further comments to the Washington Department of Financial Institutions (DFI) regarding proposed amendments to the state's Predatory Loan Prevention Act (PLPA). The AFC, which represents fintech companies and innovative banks, is urging regulators to make additional changes to the rules in order to maintain consumer access to responsible credit, especially for low- and moderate-income communities.
Phil Goldfeder, CEO of the American Fintech Council, stated, “Protecting consumers and ensuring access to responsible credit are not mutually exclusive, and Washington’s rules must reflect a balanced, pragmatic approach that ensures access to safe credit tools. Washington families deserve access to fair and transparent financial products, not policies that drive them towards predatory alternatives.”
The AFC's letter continues its support for a 36 percent interest rate cap, describing it as a standard that balances consumer protection with financial inclusion. According to the AFC's analysis, the current 25 percent cap in Washington has already led to reduced lending volume and caused significant loss of access to credit for residents. The letter also raises concerns about DFI’s use of the Predominant Economic Interest (PEI) and Totality of Circumstances (TOC) tests, suggesting that their application could be legally questionable and might violate federal preemption principles. The AFC warns that improper implementation could limit responsible lending in the state.
Ian P. Moloney, Senior Vice President and Head of Policy and Regulatory Affairs at the American Fintech Council, said, “Regulatory clarity is essential to maintain a healthy, competitive lending market. Without thoughtful calibration of these tests, responsible bank-fintech partnerships will continue to pull back, leaving Washington borrowers with fewer and more expensive credit options.”
The AFC says it remains committed to working with state regulators on rules that protect borrowers from predatory practices while enabling responsible innovation in financial services.
The organization describes itself as a standards-based trade association representing large fintech companies and innovative banks focused on embedded finance solutions. Its mission includes promoting transparency, inclusion, customer-centricity in financial systems, supporting responsible innovation in financial services, encouraging sound public policy, fostering competition in consumer finance, and serving underserved segments.