Richard Cordray, director of the Consumer Financial Protection Bureau, said the agency is working to clean up the abuses that are plaguing the electronic payments system.
To support his position, Cordray cited J.P. Morgan Chase research showing that 25% of payments for payday loans are returned.
"A number of factors may contribute to this astronomically high return rate for payday loans. But one that seems to be particularly common and troublesome is the practice of some online lenders repeatedly sending automatic debits to collect payments," Cordray said in a speech at The Clearing House in New York Thursday.
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