A recent NonPrime101 report calls into question claims by the Consumer Financial Protection Bureau (CFPB) that its proposed rule will not adversely affect customer access to credit.
According to NonPrime101's report, authored by former CFPB Assistant Director of Research Rick Hackett, the CFPB's proposed rule will ban a cumulative 81.7 percent of loans currently available to customers. NonPrime101 also found that the rule will reduce credit access to storefront payday customers between 81.3 and 90.5 percent. Removing access to credit does not erase the need for credit or ease financial hardships. The CFPB's proposed rule will take away an effective option for millions of hardworking American families who are facing financial challenges, forcing them to turn to more expensive, often unregulated alternatives - or removing accessible credit options altogether.
Even more troubling is that the CFPB's rule blatantly ignores customer sentiment. According to CFPB Director Richard Cordray, the Bureau's consumer complain database is about to reach 1 million total complaints. However, according to the Bureau's most recent consumer complaints report, payday loans accounted for just 1.6% of all complaints.
In fact, complaints about payday loans have seen a double digit decline for the past 13 straight reports. The CFPB's proposed rule is an attempt to ban, not regulate, payday loans based on an ideologically-driven agenda lead by people who have never had to use the product.