With high-pitched rhetoric and scary warnings, the payday lending industry is attempting to mobilize its borrowers to flood the CFPB with comments opposing the agency's efforts to issue rules regulating the industry.
Individual payday lenders, such as Advance America, are providing Internet links to trade group websites that make the process of commenting as simple as… well, taking out a payday loan.
"Tell policymakers in Washington, D.C.: Don't Take My Credit Away," Speedy Cash, which offers loans on line and in their stores, states on its website.
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Included on the warning is a link to a website, "creditstrengthens communities.com," where people can sign a form letter that is automatically sent to the CFPB.
The website does not talk about the operator of the website, The Community Financial Services Association of America, a trade group representing payday lenders.
The CFPB is soliciting comments on the proposed rules – which total more than 1,300 pages – until Oct. 7. So far, almost 57,000 comments have been submitted on the controversial plan. The rules and the comments are posted on the federal government's regulatory website, regulations.gov. The payday lending rules are among the top trending topics on the government-wide website.
Credit unions have been pressing for an exemption from the rules, which are designed to rein in payday lending that the CFPB considers predatory. The agency defined a payday loan as a short-term loan that is typically due on the borrower's next payday. Borrowers usually must give lenders access to a checking account or write a post-dated check for the full balance. The loans may cost between $10 and $30 for every $100 borrowed, and sometimes carry an APR of almost 400%.
The CFPB rules would permit loans modeled on the NCUA's Payday Alternative Loan program to continue.
But payday lenders are warning that they will not be able to continue making loans if the CFPB rules are adopted.
"These new rules will put so many restrictions on products you use, including payday and title loans that you may no longer be able to qualify for a loan," the Financial Service Centers of America, another trade group warns on its website that can be reached through payday lenders.
The group urges consumers to submit comments to the CFPB.
"In a brief (300-400 words) summary, explain who you are and how small loans work for you or have helped you in the past," the group directs consumers.
Some people are more succinct.
"I, Pedro want to take my money when I want to!!!!!" states one commenter identified as Pedro Ramon.
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