As the Consumer Financial Protection Bureau (CFPB) finalizes a proposed rule to address payday, vehicle title, and other certain high-cost installment loans, Consumer Federation of America and other consumer and civil rights groups have offered comments to improve and strengthen the rule. The proposed rule marks the culmination of over four years of extensive information gathering and data analysis by the Bureau. We thank and commend the CFPB for this work, which has resulted in a robust record of evidence that strongly supports taking regulatory action to address unfair and abusive practices in this market.

As the CFPB’s proposal makes clear, the record supports a rule rooted in the fundamental principle that lenders should make a reasonable determination that a borrower has the ability to repay a loan before making it. But the record also supports a stronger rule in several critical respects; indeed, it provides ample evidence that stronger protections are necessary to prevent unfair and abusive practices.

Our recommendations are informed by five principal evidence-based concerns. Together, these concerns form the lens through which we view each proposed provision. The CFPB shares these concerns, and yet we fear that they are not consistently assigned the weight they warrant.

Click here to view an executive summary of CFA’s comments to the CFPB regarding the proposed rule