On March 26, the Community Financial Services Association (“CFSA”) held a press call to discuss the CFPB’s rule-making process for the development of payday loan regulations. CFSA Chief Executive Officer Dennis Shaul delivered brief opening remarks before answering questions from the press immediately ahead of a CFPB Payday Loan Field Hearing in Richmond, Virginia.
In a statement released ahead of the call, Shaul noted that “CFSA welcomes CFPB’s review of the payday lending industry and we are ready to consider payday loan reforms focused on the well-being of clients. and supported by real data. Shaul called on the CFPB to develop data showing what percentage of clients benefit from their use of payday loans and to use that number as a basis for comparison with the percentage of clients who experience “payday debt traps” as described by CFPB director Richard Cordray. Shaul expressed concern about the impact of any CFPB regulations that could negatively impact clients well served by payday loans.
Shaul also called on the CFPB to serve as an “honest arbiter” between the payday lending industry and consumer advocates. Shaul noted that the rule-making process should not become “a contest between those who are for and those who oppose payday loans, but what is best for customers.”
CFPB’s outline of proposals for the upcoming Small Business Review Advisory Panel recognizes that CFPB’s proposals will result in loss of volume, capital and revenue for lenders and likely drive some lenders out of the market or result in consolidation substantial among existing market participants. Shaul said chasing market choices doesn’t serve businesses or customers.
