Payday Lending Is Focus of Consumer Bureau Alabama Hearing

Bloomberg
January 20, 2012
Dougherty, Carter

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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