Payday Industry’s ‘Fake’ CFPB Comments Criticized at Congressional Hearing, Adds Pressure on Kathy Kraninger to Restore Integrity to Tainted Payday Rulemaking Process

Allied Progress’ Public Comment to CFPB Details the Thousands of Suspiciously Identical Pro-Payday ‘Personal’ Stories Submitted, Urges Payday Protections Be Preserved

Watch Congresswoman Tlaib’s Questioning Here 

WASHINGTON, D.C. — Reports on the payday loan industry’s renewed efforts to manipulate the CFPB’s payday lending rulemaking process were raised at a Congressional hearing today examining the Trump-CFPB proposal to kill payday protections – including some reports based on consumer advocacy group Allied Progress’ findings that more than 7,000 pro-payday comments used suspiciously duplicative language. For example, over 200 comments from purported borrowers claimed verbatim that a payday loan was “needed to replace my hot water tank.”

Congresswoman Rashida Tlaib (D-MI) asked a CFPB official testifying today if the bureau can “ensure fake comments are filtered and that when industry players abuse the comment process, they will be held accountable?,” adding later that she “looks forward to the bureau taking meaningful and swift action to ensure this process is not corrupted.”

Allied Progress expressed similar concerns in its official public comment submitted to the CFPB (See excerpts below).

“The payday industry hasn’t even bothered to deny that they’re behind the hundreds of comments parroting the same supposedly pro-payday ‘personal’ anecdotes over and over again,”said Jeremy Funk, spokesman for Allied Progress. “This is what the industry thinks will create the impression that the public is clamoring for abusive 400% interest loans. But the question is, what is Director Kraninger going to do about it?  Will she give the payday industry another gift by turning a blind eye to their manipulation of this process, or will she take steps to ensure that only legitimate voices are heard?”

Excerpts from Allied Progress’ public comment [full comment here]

Dear Director Kraninger:

We appreciate the opportunity to submit a public comment concerning the Consumer Financial Protection Bureau’s (CFPB) proposed rule on Payday, Vehicle Title, And Other High Cost Installment Loans. We believe strongly that the proposal would put millions of consumers at risk of financial ruin. We have the benefit of knowing what will happen if the ability-to-repay standard is not allowed to take effect, because it simply means maintaining the status quo. Predatory lenders pursuing profit would continue targeting hardworking Americans who they know do not have the ability to pay back loans in time. More consumers will find themselves in nearly inescapable cycles of debt, put under enormous pressure by the industry to take out additional loans to pay off old loans with average APRs near 400 percent. This repeal proposal does nothing to pull consumers out of the payday debt trap; it only makes it easier to fall in.

We also wish to raise serious concerns about the payday industry’s influence on the rulemaking process, including an apparent effort to game the public comment system. For the past three months, the CFPB has been receiving comments from those both in favor of and opposed to this rule. While many of the comments supporting this rule may seem genuine, we are urging that the subset, identified in the attached report and highlighted below, receive greater scrutiny as to their validity. We make this serious request for two reasons:

1)    The payday lending industry has a history of using deceptive practices to push law and policy makers to support their interests.

2)    Thousands of comments that have already been received by the CFPB from purported borrowers in support of this rule use the exact verbatim phrasing, calling into question their authenticity.

Allied Progress Has Identified At Least 7,128 Comments Submitted In Support Of The Proposed Payday Rule That Contain Specific, Duplicative Language, Amounting To Over 27% Of The 25,983 Comments Submitted As Of May 13, 2019: 

·       At Least 214 Comments Claim, Verbatim, That The Borrower Took Out Payday Loans Because They “Needed To Replace [Their] Hot Water Tank” And Their “Appliances Needed To Be Repaired And Eventually Replaced,” Citing Cash Connection As Their Lender Of Choice.

·       At Least 221 Comments Claim, Verbatim, “I Have A Long Commute To Work And Its Better For Me Financially To Borrow From Cash Connection So That I Can Still Make It To Work Than To Not Take Care Of My Car And Lose My Job Because Of Absences.”

·      At Least 141 Comments Claim, Verbatim, That Payday Loans Allow The Borrower To Help Pay For Their Daughter’s College So She Won’t “Grow Her Student Loan Debt To An Amount She Will Never Be Able To Pay Off,” Noting, “Shes A Good Student And Has A Job But She Still Needs Some Help.”

·       At Least 201 Comments Contain The Exact Phrase: “I Borrow Because I Now Take Care Of My Parents And My Children. I Still Want To Be Able To Enjoy Life And Not Feel Burdened By The Additional Expenses That Are Piling Up.”

·       At Least 198 Comments Contain The Exact Phrase: “I Borrow Because My Medical Expenses Are Too High For Me To Pay Without Borrowing. I Need My Medications. My Insurance Doesnt Cover Most Of My Expenses.”

·       At Least 852 Comments State, Verbatim, That The Borrower Supports The “Proposal To Rescind And Delay Portions Of The 2017” Rule Because “Mandatory Underwriting Would Be Too Costly And Time-Consuming.”

·       At Least 5,301 Comments Submitted Contain The Exact Phrase: “Without Them, I May Not Be Able To Meet My Financial Obligations. Millions Of Americans Like Me Rely On Payday Loans, And The Government Shouldn’t Take Away Our Access To Credit.”


It is our hope that the payday industry’s commentary on the current proposed rule is not given greater consideration than other stakeholders after donating more than $2.5 million to President Trump’s campaign and inaugural committees and spending nearly $6.5 million lobbying since he took office. As you recently acknowledged to Senator Chris Van Hollen (D-MD), the industry stands to gain more than $7 billion annually as a result of the proposed rule. The greatest consideration should be given to how best to protect consumers, not industry profits.

At the end of the day, we hope to see the CFPB put the ability-to-repay standard into effect as scheduled on August 19, 2019, and not use the thousands of industry-manufactured “personal” stories to justify killing crucial borrower protections.

Thank you for your thoughtful consideration of our comment. If you have any questions or need additional information, please don’t hesitate to contact us directly at 202-644-8526.

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