WASHINGTON — The Consumer Financial Protection Bureau is getting an earful from payday lenders, consumer advocacy groups and lawmakers as the comment period is set to close Friday on its plan to restrict small-dollar lending.

The agency said Wednesday it has received more than 500,000 comments on the proposal — and many more may be filed in the coming days.

"The large volume of comments received so far is another indicator of the importance of these issues and our work to create new consumer protections for these types of loans," said David Mayorga, a CFPB spokesman. "We are working to process and publish comments as efficiently as possible."

The plan would institute new protections for payday loans, including a general requirement that lenders assess borrowers on whether they can repay a loan before taking it out, unless it meets certain other criteria.

The Community Financial Services Association of America, which represents the payday industry and opposes the proposal, said it estimates at least 1 million consumers will have voiced opposition to the rule by the time the comment period closes on Oct. 7.

"The staggering number of comments submitted to the CFPB has stunned even those of us who already know how much customers value access to small-dollar loan products," said Dennis Shaul, the CFSA's chief executive. "The CFPB must quickly move to address this backlog of public comments and each comment to the CFPB must be reviewed before the bureau can begin its deliberations on this rule, regardless of when they were uploaded."

Consumer advocates, on the other hand, point to more than 400,000 letters that have been sent to bureau supporting the plan or calling for it to be made even stronger.

They claim that payday lenders are pressuring consumers into submitting comments.

"We believe the payday industry is using pressure on borrowers and sophisticated automated technologies to submit comments favoring limited CPFB oversight" of the payday industry, said Gynnie Robnett, payday campaign director for Americans for Financial Reform. "Payday lenders have used questionable tactics to create fake borrower testimony in the past."

On a conference call with Robnett, Sen. Jeff Merkley, D-Ore., said he saw similar practices when he was in the state legislature at a time when it was contemplating increasing regulations for lenders.

"I started receiving huge bags of letters at my house" opposing the rule, Merkley said.

However, upon further investigation and calling the phone numbers listed on the letters, Merkley and his staff discovered that lenders were pressuring borrowers to write at the same time they were taking out a loan.

"I called these families and I can tell you not a single family of those that submitted comments that we were able to reach actually were opposed to reform," Merkley said. "They were simply pressed to do this at the point they were taking out a payday loan."

The CFSA said such claims are unsubstantiated and unlikely to be the case when the CFPB reviews comments that are due Friday.

"We fully expect that critics are going to attack these engaged customers and come up with far-fetched theories to try to undermine their comments because these special interest groups refuse to accept that so many people value these loans and use them responsibly," Shaul said.

Consumer advocates and Democratic lawmakers have called on the CFPB to strengthen the proposal by closing loopholes that would allow lenders to make short-term loans without assessing borrowers' ability to repay.

Payday lenders, meanwhile, claim the proposal will cut off credit to low- and moderate-income consumers if it is finalized as proposed.

Some community banks and credit unions had hoped the proposal would give them leeway to deploy certain types of short-term credit that they say act as an alternative to payday lending. But the proposal left them disappointed.

"Credit unions want to fill the gap," but the CFPB rule "just misses the mark," said Ryan Donovan, chief advocacy officer at the Credit Union National Association.

"To the extent that there were ways for credit unions to offer safe and affordable small-dollar loans it makes that more difficult," Donovan said.

Donovan said he expects upward of 1,000 credit union members to send letters to the CFPB opposing the plan.

CFPB Director Richard Cordray has pointed to a payday alternative loan allowed by the National Credit Union Administration as a model that other institutions could adopt.

But Donovan said the bureau's proposal would make that product more difficult to offer.

"The CFPB says that they want to exempt the PAL program. What they have really done is add new requirements to the PAL program and for federal credit unions they have added an additional layer of regulation," Donovan said.

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