The Canadian government is working towards regulating consumer credit cards. Canadian Finance Minister Jim Flaherty believes that these regulations will aide consumers by helping to reduce high credit card interest rates. While some support Flaherty’s mission at hand, others are not so quick to jump on the credit card regulation boat.
In fact, some (including MasterCard Canada president Kevin Stanton) believe that “…regulatory price controls will suppress innovation, reduce competition and harm consumers” (CBC). While Canada’s Finance Minister and major credit card companies battle it out, Canadian banks are viewing the governmental promise of regulation in a whole different kind of light.
Banks are acting as quickly as possible by keeping a close eye on all accounts, and “…simply reducing the available credit where (they) feel that it is absolutely necessary” (CIBC). This means that fewer credit card and loan applications will be approved.
Large credit limit cuts have already been made when it comes to high risk clients, and those that are seeking new credit cards are being outright denied. As banks continue to cover their assets, consumers are beginning to turn to alternative lending sources.
Non-traditional lending companies are now playing a crucial role within the lives of consumers. As more and more banks strive to limit their losses, consumers are left to fend for themselves. What consumers are finding is that private asset based lenders are a lot more forgiving than those of the traditional sort. In fact, those consumers that are in desperate need of a loan are far more likely to be approved for that loan through a private lender.
Private asset based lenders now play a large role within the financial lives of most consumers. Unaffected by constantly fluctuating government regulations and crack-downs, private asset based lenders are providing many consumers with an appealing financial option. The number of people that will no longer be able to gain a traditional loan is quickly growing, which makes private asset based lenders the best possible loan choice available.