Last February, the Consumer Financial Protection Bureau or CFPB proposed new rules that would roll back key provisions of the CFPB’s 2017 Payday Rule, which enacted modest protections for borrowers. The roll backs proposed were set to be finalized by the end of April 2020.
The New York Times reported on April 29 that the process to repeal the 2017 rule was riddled with research manipulation and inconsistencies. The Consumer Federation of America joined five other consumer groups on May 1 to call on the CFPB “to suspend the finalization of the rule pending a full investigation of the facts,” and state that “there is a strong case to be made that CFPB needs to restart the regulatory process entirely.”
In addition, on May 1, more than a dozen lawmakers joined in asking for “an examination of political pressure at the consumer bureau,” as The Times reported.
“The rulemaking process is designed to include an exhaustive and rigorous analysis of evidence-based research and public and industry opinion,” said Rachel Weintraub, legislative director and general counsel for the CFA. “The potential inconsistencies, interference, and expedited review highlighted in The Times article compels suspension of the finalization of the rule and a full investigation of the rulemaking process.”
“The CFPB was created as an independent financial regulator to protect consumers in the financial marketplace,” said Rachel Gittleman, financial services outreach manager for the CFA. “Especially when consumers are facing the serious economic challenges posed by the COVID-19 pandemic, the CFPB must protect consumers.”
However, the potential misconduct identified in the April 29 article in The Times raises serious concerns about the CFPB’s commitment to protecting consumers from the cycle of debt posed by payday loans, Gittleman said.