Complaints against payday loans decreased by 14 percent from December 2014 to February 2015 (466 complaints) to December 2015 to February 2016 (401 complaints), according to the Consumer Financial Protection Bureau's (CFPB) March consumer complaint report.
In recent Congressional testimony, Director Cordray downplayed the lack of payday complaints, theorizing that consumers mislabeled their complaints as debt collection. "Some of these complaints are simply misclassified," Cordray testified. "People think they're complaining about debt collection."
Yet this latest report, which specifically examines debt collection, finds no such instance of consumers mislabeling their complaints. And if debt collection is the biggest complaint of payday borrowers, why has that not been the focus of the upcoming payday lending rule?
Continued, Steady Decline Evidence that Consumers Value Short-term Loans
This is the seventh report in a row in which payday loans have seen a double-digit 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 1.5 percent (13,009) of all complaints (828,918).
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).
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 and unregulated, online lenders.