Comment on the CFPB’s Rule on Payday, Vehicle Title, and Certain High-Cost Installment Loans
The Bureau’s 1,300-page notice of proposed rulemaking covers a lot of ground. However, many questions still remain about the needs of the participants, the nature and operation of underlying credit markets, and the ways the rule would affect the consumers who currently rely on small-dollar loan products to meet their needs. In its frequent citation to its own beliefs unsupported by testable evidence, the Bureau itself acknowledges persistent research gaps. Rather than moving ahead with an intensely complicated rule that has the potential to harm an already struggling group of consumers, the Bureau should undertake additional research in this area to better understand these consumers and their needs. We have suggested some areas that would be fruitful for consideration, including how the rule will affect borrowers, how to best assess the cost and suitability of a loan, how the CFPB can avoid squelching innovation and competition, and the role that can and should be played by the states and private sector.