Payday lenders have been mobilizing their customers to push the federal government to ease Obama-era regulations of the industry, according to research by a consumer advocacy group that favors the rules, the Wall Street Journal reported. Since the Consumer Financial Protection Bureau began soliciting public comment on a proposed rule governing small-dollar, high-interest consumer loans, the lenders have organized thousands of customers who have sent in duplicated comments in support of the change, said Allied Progress, the consumer group. The proposed rule, unveiled in February by Kathy Kraninger, the new director of the CFPB under President Trump, has been welcomed by payday and auto-title lenders. It aims in effect to repeal a regulation enacted under President Obama that would have imposed tough new underwriting standards. The 90-day public comment period ends May 15. In a report to be published Tuesday, Allied Progress found that nearly a quarter of the 16,761 public comments submitted as of May 11 contained duplicated language supporting the latest regulatory revision. For example, 2,364 comments said, “As you take a second look at the payday loan rule, please don’t make it more difficult for me to get these loans … Millions of Americans like me rely on payday loans, and the government shouldn’t take away our access to credit.” At least 213 others contained sentences reading: “I needed to replace my hot water tank. Then my appliances needed to be repaired and eventually replaced,” according to Allied Progress. At least 141 comments said, “I borrow to help my child pay for college ... I can borrow a small loan rather than have her grow her student loan.” At least 851 comments said: “Mandatory underwriting would be too costly and time-consuming.” Read more. (Subscription required.)
In related news, the CFPB is already in the midst of enacting changes to some of its rules, namely the requirements for the data collection and reporting stipulated by the Home Mortgage Disclosure Act and its enforcement practices, but those may not be the only rule changes coming from the CFPB, HousingWire.com reported. The CFPB yesterday announced that it plans to “periodically” review its regulations and may amend or even abolish existing rules. According to the CFPB, the review of its rules is stipulated by the Regulatory Flexibility Act, which establishes that agencies should review certain rules within 10 years of their enactment and consider those rules’ impact on “small businesses.” The purpose of the review is to “minimize any significant economic impact of the rules upon a substantial number of small entities,” the CFPB said. At the end of each review, the bureau will determine whether the rule should stand in its current form, be revised, or rescinded entirely. Read more.
