The Obama administration’s crackdown on payday lending to low-income borrowers has generated unusually heavy public feedback, stoked by computer-generated comments and the escalating ideological battle over consumer financial issues, the Wall Street Journal reported today. The Consumer Financial Protection Bureau (CFPB) has received about a million public comments on rules governing payday lenders since issuing the proposal in June. That figure is the highest in the agency’s five-year history, far exceeding the 50,000 received on a May proposal restricting mandatory arbitration agreements and giving consumers more power to sue financial firms. Advocates say the use of software that prewrites comments for people to submit electronically has helped fuel the outcry. The payday-lending rule is the federal government’s first comprehensive effort to regulate small-dollar, nonbank lenders that often charge triple-digit interest rates and cater to about 12 million Americans. The proposal asks lenders to go through the process of verifying that consumers can pay back those loans before extending the credit, a requirement that advocates say will help keep borrowers from falling into cycles of debt.
