The Consumer Financial Protection Bureau suppressed positive consumer testimonials about payday lending from public view, according to a trade association representing payday and short-term lenders.
The Community Financial Services Association of America on Tuesday said documents obtained under a Freedom of Information Act request show that 12,308 of the 12,546 testimonials submitted to the CFPB’s “Tell Your Story” consumer portal during a five-year period reflect positive impressions of the industry.
“These positive consumer stories, which comprise 98% of the payday loan-related submissions, have never been made public before,” the Alexandria, Va.-based group said Tuesday in a statement. “Instead, the Bureau buried and ignored these real-life customer stories as it marched forward with proposed rules that would restrict access to credit for millions of Americans.”
The allegations come as the independent agency receives comments on proposed rules for payday and other short-term loans, which progressives say ensnare low-income borrowers in a cycle of debt. The CFPB handled about 5,500 complaints about payday loans last year, according to an annual agency report.
An agency spokesperson did not immediately provide a comment in response to the Community Financial Services Association allegations.
CFSA said that of 240 comments characterized as negative in the Tell Your Story portal, 84 were mistakenly categorized as relating to payday loans, and 74 related to scams or unregulated lenders, which the group says the proposed rule “fails to address.”
“The Bureau is pursuing its ideological crusade against the regulated short-term lending industry with its proposed rules, while ignoring the positive experiences shared by consumers,” said Dennis Shaul, chief executive of the organization, in a statement. “While claiming to listen to consumers through the ‘Tell Your Story’ initiative, the CFPB discounts actual consumers’ needs and preferences. It is clear that millions of consumers are satisfied with the payday loan product and services, and do not want the federal government to take this valued credit option away from them.”