Prepared remarks delivered by Richard Cordray at the CFPB’s field hearing on payday lending today in Birmingham, Alabama identify some of the initial issues on which the CFPB will likely be focusing. Mr. Cordray indicated that the CFPB plans to “dig deep” on the topic of “repeated long-term use of payday loans” and described a situation reported by a consumer where “not enough is left to pay other bills” because “the payday lender takes the money directly from the consumer’s checking account.” Also mentioned were unauthorized debits to a consumer’s checking account by fraudsters who obtain financial information from people shopping for payday loans and aggressive debt collection tactics.
Mr. Cordray also announced that the CFPB has issued its Short Term, Small-Dollar Lending Examination Procedures, which are intended to serve as a field guide to CFPB examiners when conducting examinations of banks and payday lenders. We will be sharing our thoughts soon on the procedures.