Payday Lending Case Study
The Payday Lending Industry and CFPB Overreach
The Payday Lending Industry and CFPB Overreach
The payday lending industry is increasingly gaining support from some surprising sources in its campaign against CFPB overreach and the agency 's purported plans to regulate payday lending out of business. The Consumer Financial Protection Bureau, which was established in 2010 to protect consumers from predatory lending practices, was originally expected to limit payday lending severely or attempt to abolish it entirely. The CFPB was granted extraordinary regulatory powers that weren 't subject to the traditional checks and balances of free enterprise, legislative debate and judicial review.
Fortunately for people with bad credit and few financial resources, payday lending has lots of grassroots and political support, which consumer advocates and political opponents of the industry grossly underestimated but are gradually realizing due to the groundswell of support for short-term loans from disenfranchised U.S. citizens. Opposition to the CFPB and its unregulated practices have united payday lenders and the industry’s critics on the subject of regulatory overreach.
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CFPB Overreach Ignites Opposition from Traditional Lenders and the Payday Lending Industry
A surprising aspect of the Bureau 's policies involves the CFPB 's determination to expand its powers beyond its legislative mandate. The agency has generated furious political conflict by attempting to regulate banks, traditional lenders, auto finance companies and dealership financing departments. Democrats, often credited with leading the fight that created the agency, have crossed the political aisle to nullify CFPB regulations that targeted automobile lenders and charged them with routine racial discrimination practices. The list of complaints against the CFPB
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