Payday Lending Is Focus of Consumer Bureau Alabama Hearing
January 20, 2012
The U.S. Consumer Financial Protection Bureau recently held its first public
hearing, with regulators focusing on payday lending facilities. The Alabama
meeting was the first under the leadership of newly appointed head Richard
Cordray. "The purpose of all our research and analysis and outreach on these
issues is to help us figure out how to determine the right approach to protect
consumers and ensure that they have access to a small-loan market that is fair,
transparent and competitive," Cordray said at the session. While no mention was
made of specific new regulations or restrictions for the industry, the director
assured the agency is "thinking hard about these issues." He also said that the
public and consumer advocates should not grow complacent now that the bureau is
operating, but should continue to work with local and state officials to combat
such problems. According to Cordray, the CFPB will dig deep into the short-term
loan industry to figure out what needs to change and how that can be
accomplished. In that respect, he explained that the regulator will use its
examination powers to audit the books of payday lenders, ask probing questions,
and cooperate with them to rectify any wrongs. On the enforcement side, Cordray
said the watchdog will focus in particular on unauthorized debits to consumer
accounts as well as aggressive debt collection practices.
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