Some clues as to what the CFPB might initially be focused on as they wade into the Payday Industry

Some clues as to what the CFPB might initially be focused on as they wade into the Payday Industry

by The CAB Man Texas on April 11, 2014

Today my good friend Max Wood at Borrow Smart Alabama shared the CFPB Blog of Ballard Spahr LLP, called the “CFPB Monitor.” Max and Borrow Smart are at the forefront of the CFPB issue and his compliance efforts via Borrow Smart alongside Ballard Spahr have been way ahead of the curve.

As the CFPB evolves we get clues along the way of what might be expected. On April 7, 2014 CFPB General Counsel Meredith Fuchs released some clues in reference to several of the industry areas the CFPB is looking at, and of importance to Credit Access visitors, she made reference to “payday lending.” See below for an excerpt from Ballard Spahr’s CFPB Monitor Blog:

“Turning to payday lending, Fuchs cited the recent CFPB report in explaining that the CFPB remains concerned with consumers’ sustained use of short-term, small dollar loan products, the amortization of these products and the use of these products by the elderly and others that depend on fixed government benefits. While Fuchs vacillated on the specific timing for payday lending rule-making, she did indicate that the CFPB would continue to aggressively police the ACH, lead generators and other “choke points” that payday lenders rely upon to reach consumers. Given that the CFPB does not intend to commission any further studies analyzing the benefits of payday loans, we anticipate that the proposed rule will impose rigid, arbitrary limits on numerous payday loan features.”

It will be interesting to see how these fundamentals are addressed in the rules that eventually get put into effect. Many operators I know would agree that balanced and reasonable regulation that address the named concerns above.

Contact Michael Brown of CAB Consulting if you have comments or questions. Call 214-293-8676, or email!

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