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CFPB’s Payday Loan Proposal Gets Record 1 Million Comments

payday_Calendar_money_iconThe CFPB’s proposed rule on short-term lending has received about 1 million public comments, the federal agency confirms. That stands as the highest number of public comments on a single proposed rulemaking since the bureau launched five years ago. The agency received about 50,000 comments on a proposal earlier this year to restrict mandatory arbitration agreements and released its new prepaid rules after receiving roughly 35,000 comments.

“The staggering number of comments submitted to the CFPB has stunned even those of us who already know how much customers value access to small-dollar loan products,” said Dennis Shaul, CEO of the Community Financial Services of America, a trade group for payday lenders. “The CFPB must quickly move to address this backlog of public comments and each comment to the CFPB must be reviewed before the bureau can begin its deliberations on this rule, regardless of when they were uploaded.” The group estimates that of those 1 million comments, only about 144,000 have been posted by the federal agency. The CFPB had no immediate response.

Announced in June, the payday loan rules would require short-term lenders to assess borrowers’ ability to repay loans and ban repeated attempts to debit accounts for repayment that the bureau says can result in excessive fees. The rule would cover payday loans, auto title loans, deposit advance products and certain other installment loans. Among the requirements: Lenders must verify and evaluate prospective borrowers’ net incomes, debt obligations, housing costs and living expenses, among other factors, before extending a loan. The CFPB has estimated that its rule would eliminate 84 percent of short-term lending volume.

The proposed payday lending rule attracted sustained attention on social media from lobbying groups on each side of the issue, both consumer groups and payday lenders, and the use of software that provides prewritten comments also led to the high level of feedback, according to the Wall Street Journal. Among the hashtags used in the effort was #stopthedebttrap, part of a Twitter campaign by the Center for Responsible Lending and Americans for Financial Reform. One recent tweet from St. Louis alderman Cara Spencer lamented lobbying by the payday loan industry in that baseball-crazed city: “It’s unfortunate that the lobbyist who gives @Cardinals tickets to the board [of aldermen] is down here now lobbying behalf of the payday loan industry.”

The newspaper notes that other members of the 1-million-comment club—a rare achievement when it comes to federal regulations—include proposals to cut power plant emissions and to ensure “net neutrality.”

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