WASHINGTON – House Republicans are urging the Consumer Financial Protection Bureau to process a deluge of comment letters on the bureau's proposal to restrict small-dollar lending.
The agency's plan was published in June, and the public had until October to comment. The agency received nearly 1.4 million letters, though many were duplicates. Only 200,000 had been published, and the CFPB said that, absent duplicates, the true number is closer to 400,000.
Consumer groups accused the small-dollar loan industry of intentionally flooding the CFPB with form letters in an effort to slow down the rulemaking because the bureau is required to publish all the letters before it comes out with its final determination.
The lawmakers said in their letter that the CFPB isn't being transparent and requested more information on how it is processing the letters.
"Since the comment portal opened, it has been brought to our attention that the majority of consumer comments submitted to the CFPB were not visible on the website, potentially leaving thousands of voices unheard, including those of our constituents," said the letter from Rep. Sean Duffy, R-Wis., and more than 40 other GOP lawmakers. "Is there intent to hide the comments of consumers who support the current state regulatory framework of legal licenses short term lending?"
The lawmakers also expressed concern that the CFPB proposal would hurt consumers by reducing small-dollar credit availability. The agency has estimated that the industry could lose as much as 75% of its revenue, putting many lenders out of business.
"As you are well aware, the need for credit does not simply disappear," the letter said.
Consumer groups argue that the loans are predatory, with exorbitant interest rates, and do more harm than good. A CFPB spokesperson said the bureau had received the lawmakers' letter and was reviewing it.