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You can submit a payday loan complaint

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Payday loans are typically marketed as a way to get quick cash when you need it. They are generally for small amounts due quickly, like on your next payday, and they often give the lender a claim on your bank account. They are sometimes also called cash advance loans.

We’ve heard from people who like the ease of obtaining a payday loan when they need to avoid paying their bills late. Many other people have raised concerns about the high cost of payday loans, not being able to repay the payday loan while still having enough money left for other expenses, and the debt collection practices they encounter if they can’t repay the loan.

Starting today you can submit a complaint if you have a problem with your payday loan. You can submit a complaint about:

  • Unexpected fees or interest
  • Unauthorized or incorrect charges to your bank account
  • Payments not being credited to your loan
  • Problems contacting the lender
  • Receiving a loan you did not apply for
  • Not receiving money after you applied for a loan

You can also get clear, unbiased answers to questions about payday loans on Ask CFPB or by calling (855) 411-2372.

Your complaints help us identify business practices that may pose risks to consumers and we use that information in our work to supervise companies, enforce federal consumer finance laws, and write better rules and regulations.

What is a payday loan?

What military families should know about payday loans

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Starting today, you can submit payday complaints to us. So this seems a good time to remind you that if you are a servicemember on active duty you, your spouse, and certain dependents have the protection of a special law called the Military Lending Act (MLA). The MLA says that you can’t be charged an annual percentage rate higher than 36 percent on certain types of consumer loans, and that includes certain payday loans as well as auto title loans and tax-refund anticipation loans.

So what exactly is a payday loan? It tends to be a short-term, usually high-cost, cash advance where you pay a fee to borrow money (for example, a $15 fee for every $100 borrowed) and you are expected to pay it back in a short time, usually a couple of weeks. People often tell us that the MLA cap of 36 percent seems like a pretty high limit – but what they don’t realize is that the average annual percentage rate on a payday loan like the one above is 390 percent! And if you roll over the loan repeatedly because you can’t pay it off like you hoped you could, then the cost can skyrocket over time. We’ve seen examples of payday loan borrowers who end up paying far more in fees than the amount they originally borrowed. In some cases they could have gone to one of the military relief societies, if it was an emergency, and gotten a loan at zero percent interest. Yes, zero – no fee at all.

So, the good news is that the MLA provides you protections that the average citizen doesn’t have when it comes to payday loans. And the CFPB is one of several federal agencies that have the power to enforce the MLA. But your complaints are key to helping us enforce it and other consumer financial laws.

You can submit a payday complaint online or by calling (855) 411-2372. Don’t forget to tell us you’re “military” when asked!

Complaints help us spot trends. Submitting a complaint helps us see patterns, focus our resources, and identify the worst actors – so your complaint can make a difference!

Your chance to weigh in on debt collection practices

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We want to hear about your debt collection experience—weigh in now.

Since we began taking debt collection complaints a few months ago, companies have responded to more than 5,000 debt collection complaints. We see that this is an important issue for consumers and today we’re adding these complaints about debt collection to our public Consumer Complaint Database.

We’re also taking the first steps to gather information to determine what rules would be appropriate to protect consumers who are subject to debt collection. We’re issuing an Advance Notice of Proposed Rulemaking (ANPR) today —and what that means is that we are considering issuing rules for the debt collection industry, but first we want to hear from you so we can learn more about the debt collection system. We’d like to hear about your experience with debt collectors and how they should act when they try to recover debts.

Getting input from the public – you – is an important part of the process. Debt collection is a complicated topic, with many consumer protection concerns.  We are issuing an ANPR in order to ask a number of questions about different aspects of the industry and the consumer experience. The ANPR will be published in the Federal Register, where anyone can submit comments to respond to the questions. We’re particularly interested in learning about the accuracy of information in the debt collection industry, whether consumers are aware of the debt and their rights, and whether consumers are being treated fairly.

Although the public can submit comments formally in response to the notice at regulations.gov, we want to make it easier for consumers and small businesses to tell us what they think about debt collection practices. To do that, we’ve partnered with RegulationRoom.org, operated by the Cornell University’s eRulemaking Initiative, where you can provide your comments in an interactive and intuitive way.

RegulationRoom.org is not a government website. It’s operated by law students and staff at Cornell Law School, with the goal of making it easy for people to submit comments to government agencies. They are working on removing barriers to public participation, and we are excited to be partnering with them again.

The staff at RegulationRoom.org realizes that most people are generally unfamiliar with the formal commenting process at Regulations.gov (the official government site). So they present information, conduct a conversation, and then collect views until the forum closes about a week before the end of the comment period, so that their team can assemble all the feedback into an official comment. Those who have participated get one more chance to react to the summary before it is submitted formally to the CFPB through regulations.gov. And, like all other formal comments, we will read and consider them as we consider consumer protection rules for the debt collection market.

Explore the data

Adding debt collection complaints will take the number of complaints in the Consumer Complaint Database to more than 155,000. When you look at the data for debt collection complaints, you can even see what type of debt is involved (auto loan, credit card, medical, student loan, mortgage, etc).

Dig in and explore this new frontier of information, and remember – if you think you’ve found something interesting in the consumer complaint data, we definitely want to hear about it! We encourage the public, including consumers, analysts, data scientists, civic hackers, and companies that serve consumers to analyze, augment, and build on the information in the database to develop ways for consumers to use the complaint data or mash it up with other public data sets to reveal potential trends.

Don’t forget to share your work, from visualizations to new tools, by tweeting @CFPB or using #CFPBdata.

Save the date, Washington DC!

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Join us for an auto finance forum at CFPB headquarters, located at 1700 G Street NW, Washington, D.C. The forum will take place on Thursday, November 14 at 8:45 a.m. EST.

The event will feature remarks from CFPB Director Richard Cordray and a discussion with consumer groups, industry representatives, and members of the public. The event will be streamed live on our blog.

Space is limited and an RSVP is required to attend.

To RSVP
Email cfpb.events@cfpb.gov with:

  • Your full name
  • Your organizational affiliation

Let us know if you need a special accommodation to participate.

See you there!

Preventing illegal discrimination in auto lending

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Every year, millions of American families buy a car – and it will be one of the most significant purchases they make.

One key priority for us is protecting consumers from the silent pickpocket of discrimination. Discriminatory markups in auto lending may result in tens of millions of dollars in consumer harm each year. The average loan for a new car is up to $26,691, so a higher interest rate can make the total cost of the car much higher.

In March, we released a bulletin to help lenders that offer auto loans through dealerships make sure they are following the law. That bulletin explained that so-called “dealer markup” policies that give dealerships discretion in what interest rates to charge consumers and that create incentives for charging higher interest rates may be implemented in a way that violates the law. Research indicates that lenders’ markup policies may lead to minorities being charged higher markups than other, similarly situated, white consumers.

The auto bulletin indicated that we are engaged in the same type of fair lending analysis and scrutiny that our fellow regulators and the Department of Justice have engaged in for many years. In addition, responsible auto lenders have regularly engaged in similar analyses to monitor their own lending practices for compliance with the law.

Responsible lenders

We know that many lenders are committed to fighting unlawful, discriminatory practices and creating a fair marketplace for all consumers. In the mortgage market, laws and regulations require most lenders to collect and report demographic information about their borrowers so that they and their regulators can analyze which mortgage loans are made or denied and how they are priced, for potentially discriminatory patterns.

However, auto lenders and other non-mortgage lenders are not generally allowed to collect demographic information. Since they don’t collect this data, they use various approaches to make sure they are being fair to their customers.

Let’s say a responsible auto lender wanted to make sure that their female customers are not paying more for a loan than similarly-situated men. Before analyzing the pricing patterns, the lender needs to calculate the likelihood that a borrower is male or female. Without actually recording the gender of each borrower, to substitute, or “proxy,” for gender, responsible lenders often rely on a first name database from the Social Security Administration. The public database contains counts of individuals by gender and birth year for first names occurring at least five times for a particular gender in a birth year. Using statistics, they can determine a probability that a particular applicant is male or female based on the distribution of the population across gender categories for the applicant’s first name.

There are a greater variety of methods to proxy for race and national origin. One method used by lenders to check the probability that an applicant is Hispanic or Asian is to use the last name database published by the Census Bureau, in which the Census Bureau reports, by race and national origin, the percentage of individuals with a given surname. Another method to proxy for race and national origin uses the demographics of the census geography (e.g., census tract or block group) in which an individual’s residence is located, and assigns probabilities about the individual’s race or national origin based on the demographics of that area as reported by Census. This method is also used to proxy the probability that an applicant is African American, and it can be used to proxy for other racial and ethnic groups as well.

The role of regulators

The CFPB and other agencies are charged with making sure lenders are following fair lending laws, whether those lenders are engaged in mortgage lending or other types of consumer lending. For auto and other types of non-mortgage lending, the federal regulatory and enforcement agencies typically engage in similar analyses that use a variety of proxy methods, often drawing from the same public databases used by responsible lenders. Our method integrates two common approaches by combining the respective probabilities generated by the last name and geographical proxies. Research has found that this approach produces proxies that correlate highly with self-reported race and national origin and is more accurate than relying only on the borrower’s last name or geographic location.

Statistical methods are often refined over time. We are committed to staying in dialogue with our sister agencies, lenders and researchers to refine our proxy methods over time, so that we can stop the silent pickpocket of discrimination in various consumer finance markets.

Here’s how community-based organizations can do business with us

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So often, the work that we do relies on the knowledge and expertise that community-based organizations provide us. These organizations are our eyes and ears on-the-ground, and they give us feedback on how our work can impact people. We want to make sure that we not only informally include these organizations in our meetings and events, but also offer them the chance to do business with us through contracts.

Like any other federal agency, CFPB procures goods and services through the federal procurement process. We are always seeking the most qualified and innovative firms to do business with us, which include community-based organizations. Typically, these organizations may not use government contracts as a funding source, for various reasons, but we would like to make that option less difficult for them.

We will be hosting a training conference for community- based organizations on how to do business with us on Thursday, November 14 from 10:30 a.m. – 12:30 p.m. The conference will be held in our Washington, D.C. headquarters office and we will have procurement and financial education experts who will walk through the basic steps of federal contracting and what to prepare for. There will be a teleconference line available as well. If you’re interested in attending in-person or by phone, please e-mail cfpb_procurement@cfpb.gov by Friday, November 8. Please make note of any reasonable accommodations you may need. This event will be jointly hosted by our Office of Procurement, Office of Minority and Women Inclusion, and Office of Financial Empowerment.

In the coming months, we’ll be launching several new initiatives that may focus on financial education and capability programs. We’ll be looking for organizations to work with on these programs, and we’ll be procuring these services through federal contracts. Community-based organizations are encouraged to consider these opportunities. For example, we’ve released a draft solicitation on the “Bridges to Financial Security” initiative. This initiative aims to provide financial education to individuals with disabilities who are transitioning into the workforce, increase their financial capability, and help them take control of their finances.

We want to take full advantage of technology, transparency, open communications, and best practices during the procurement process for these initiatives. That’s why we’ll provide organizations with the resources and opportunities to compete for working with us.

The CFPB blog aims to facilitate conversations about our work. We want your comments to drive this conversation. Please be courteous, constructive, and on-topic. To help make the conversation productive, we encourage you to read our comment policy before posting. Comments on any post remain open for seven days from the date it was posted.