The Consumer Financial Protection Bureau (CFPB) is conducting a probe into companies that connect cash-poor consumers with payday lenders. A document on the agency's website says it is examining whether those entities “have engaged or are engaging in unlawful acts or practices in connection with the marketing, selling or collection of payday loans.”
The Feb. 18 document was submitted by MoneyMutual, which connects borrowers to lenders, after the CFPB requested information about the firm. It is unknown whether other companies received a “civil investigative demand” for documents as part of the investigation.
Regulators have been stepping up their scrutiny of the payday loan industry, as consumer advocates say the small, high-interest loans can trap low-income borrowers in a cycle of increasing debt. Online lenders are a particular source of concern, since they are known to circumvent state payday laws.
Financial regulators hope to sever online lenders' access to borrowers by pursuing the companies that collect borrower data and pass it along to potential lenders.