CFPB: Not Following the Data
March 26, 2015
Washington elites and activists are spreading the misperception that payday loans cause financial challenges. The reality is that people have financial challenges and use payday loans to overcome them.
Customers are satisfied with the service and appreciate having access to it – a sentiment echoed by dozens of testimonials during today’s Consumer Financial Protection Bureau (CFPB) field hearing in Richmond, VA, and reflected in the Bureau’s complaint portal: payday loans account for less than one percent of complaints to the CFPB, and only one-tenth of those complaints were about storefront lenders.
CFPB architect Sen. Elizabeth Warren (D-MA) and Director Richard Cordray, have emphasized the vital role of the consumer complaint database to the Bureau’s mission, contending that it enables the CFPB to “focus our resources wherever their complaints [lead] us.” And yet, personal ideological opposition to payday lending has led the Bureau to have tunnel vision when it comes to this popular, effective service, despite the findings of their own complaints data.
While claiming to be the voice of consumers, the CFPB ignores consumer needs, preferences and rationale in its proposed rules. Never once has the CFPB asked or attempted to answer the fundamental question: what happens to a consumer who walks into a payday loan center and is unable to get a loan to meet an urgent, financial need?
People who have no need for payday loans too often lead the charge to eliminate them. The CFPB must stop substituting their opinions for the experiences of the people who know payday lending best: people who value and rely on the service. Like the 69 percent of respondents from households that have used payday loans in the past who agree that they should be able to decide how often you take out a payday loan and not be limited by government restrictions.¿