Complaints against payday loans decreased by 19 percent from May through July 2015 (451 complaints) to May through July 2016 (367 complaints), according to the Consumer Financial Protection Bureau’s (CFPB) August consumer complaint report.
Continued, Steady Decline Evidence that Consumers Value Short-term Loans
This is the twelfth report in a row in which payday loans have seen a double-digit decline:
- Vol. 14; August 2016: 19 percent decline
- Vol. 13; July 2016: 15 percent decline
- Vol. 12; June 2016: 15 percent decline
- Vol. 11; May 2016: 19 percent decline
- Vol. 10; April 2016: 14 percent decline
- Vol. 9; March 2016: 14 percent decline
- Vol. 8; February 2016: 12 percent decline
- Vol. 7; January 2016: 11 percent decline
- Vol. 6; December 2015: 14 percent decline
- Vol. 5; December 2015: 20 percent decline
- Vol. 4; October 2015: 24 percent decline
- Vol. 3; September 2015: 12 percent decline
Overall, payday loans account for just 1.6 percent of all complaints.
This continued decline - and miniscule overall total - shows customers are satisfied with and value payday loans. According to a recent survey, nearly all borrowers surveyed (96 percent) say payday loans have been useful to them personally, and a majority (75 percent) are likely to recommend payday loans to friends and family and support allowing other regulated lenders to offer payday loans (78 percent).
A previous analysis of the CFPB data found that complaints against members of the Community Financial Services Association (CFSA)-all of which are state-regulated and agree to not only abide by all state and federal laws but also by a set of Best Practices-account for fewer than 20 percent of all complaints.
The vast majority of the remaining 81 percent of payday lending complaints to the CFPB involve illegal, unlicensed lenders. The Bureau’s proposed payday lending regulations would do nothing to stop these illegal operators; in fact, the proposed regulations would force consumers into the arms of these unscrupulous lenders.
Yet personal ideological opposition to payday lending has led the Bureau to focus on industries that consumers value instead of where real, documented harm exists, such as in debt collection, unregulated lenders and scams.