About five years ago, the government put together a federal agency called the Consumer Financial Protection Bureau (CFPB) that was created in such a way to avoid Congress oversight. Amid a lot of public buzz, the CFPB introduced the creation of a public database that was intended to catalog all of the complaints that customers care to send in to it. Speaking in a press release about the introduction of this new public database, the Director of the CFPB, Richard Cordray said, “Consumer complaints are the CFPB’s compass and play a central role in everything we do. They help us identify and prioritize problems for potential action.”
The problem with all of this? The Consumer Financial Protection Bureau’s database shows that consumer complaints about the payday lending industry, a favorite target of Cordray’s, made up less than one percent of all the complaints that were received. It was the target of far less complaints than mortgages (36 percent), debt collection actions (17 percent), credit reporting issues (15 percent) and other various categories. Complaints about payday lenders/loans only accounted for one of every 152 complaints that the Consumer Financial Protection Bureau received. That makes it 55 percent less complained about than traditional mortgages.
When one considers the seriousness with which the CFPB’s allies have put on the collected complaints – “[Consumers] could be our eyes and ears, and we could focus our resources wherever their complaints led us,” is the wording Senator Elizabeth Warrant used to describe it – you would think that the current data would make it kind of difficult for the bureau to continue waging war against these lenders.
A little bit of backstory here – the CFPB recently put together some new regulations that would effectively put payday lending companies almost completely out of existence. An example of these regulations is that the CFPB wants the payday lending industry to use underwriting standards that are very similar to those that are currently used in the mortgage industry. All of that paper work and effort to provide a small dollar loan for people who need to pay for an emergency expense – imagine that…
Despite the data, it looks like the CFPB is not going to face up to facts and ease up on the payday lending industry or take steps to help in-need consumers. As soon as it was discovered that payday loans accounted for hardly any of the consumer complaints, a CFPB spokesperson began rapidly trying to explain the findings away, saying, “Consumer complaints are just one way we learn about the issues consumers face in the financial marketplace.” This all runs contrary to earlier statements from the CFPB that insinuated the database would act as the “eyes and ears” of the bureau and that the CFPB would then follow wherever the data leads. It looks like the CFPB has an agenda that they don’t plan on bypassing, no matter what the collected consumer data indicates that it needs to back off.
In other words, the agency is going to continue down the path that it has already determined that it needs to follow; no matter what the consumers it is supposed to be protecting tell them that they actually need protection from. It should be plain to see that the CFPB has it out for certain industries, and that no matter what the facts point to, they are going to do all they can to stay on their own, self-determined track of destroying legitimate businesses. Of course, the CFPB would probably rather that you didn’t check into the stats on all of the data that they have collected. That would probably just mean that they would have to do more backpedaling in the future.
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