The Consumer Financial Protection Bureau is one of the most powerful and well-funded government agencies. This organization is responsible for policing various financial industries and protecting American consumers. In efforts to live up to its mission and to utilize all that power and money, the CFPB has not pulled any punches when going after certain types of businesses. The payday lending industry seems to be the industry that garners the most attention from the CFPB. Richard Cordray (Director of the CFPB) and his staff make no bones about reporting to the public about how bad they perceive the payday lending industry to be. Sometimes they even cite testimonials from actual consumers who have had issues with payday lenders.

It may be, however, that the CFPB has also been covering up some positive testimonials about payday lending too. A trade group that represents payday lenders and other short-term lenders has openly accused the CFPB of suppressing positive consumer testimonials and preventing the public from hearing about the good experiences that many people have with payday lending stores and websites on a regular basis.

The trade group that has made these accusations is known as the Community Financial Services Association of America. Recently, this group said that they had obtained documents via the Freedom of Information Act that prove that 12,308 of the 12,546 consumer testimonials that were submitted to the CFPB’s online database over the past five years actually were from people who had positive things to say about payday lending.

The Community Financial Services Association of America, based out of Alexandria, Virginia, recently released a statement that stated, “These positive consumer stories, which comprise 98% of the payday loan-related submissions, have never been made public before. Instead, the Bureau buried and ignored these real-life customer stories as it marched forward with proposed rules that would restrict access to credit for millions of Americans.”

These are serious allegations that come hot on the tail of the Bureau’s recent proposal for new payday lending rules. The CFPB stated that it received over 5,000 complaints about payday loans last year. However, the CFPB did not have any comments on the recent allegations brought forth by the Community Financial Services Association of America. The trade group stated that 240 of the comments had negative things to say about payday lending, 84 were not properly categorized with regards to payday loans and that 74 comments were about scams and/or lending companies that were unregulated. Oddly enough, it seems that the CFPB simply will not address these issues.

Dennis Shaul serves as the Chief Executive Officer of CFSAA. He released a statement that says, “The Bureau is pursuing its ideological crusade against the regulated short-term lending industry with its proposed rules, while ignoring the positive experiences shared by consumers. While claiming to listen to consumers through the ‘Tell Your Story’ initiative, the CFPB discounts actual consumers’ needs and preferences. It is clear that millions of consumers are satisfied with the payday loan product and services, and do not want the federal government to take this valued credit option away from them.”

Considering the seriousness of these accusations it is time for the CFPB to step up to the plate and address them once and for all. Of course, the Bureau has a long track record for not being accountable to Congress or even the American people, so it may be that we wind up seeing the CFPB simply trying to sweep these accusations under the proverbial rug. Just like it has done when other groups or individuals have stood up to this agency in the past.

Tags: , , , , ,

You must be logged in to post a comment.


Make a comment

Name

Email

Website

You can use these tags:
<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

Trackback URL for this post.