CFPB Review

CFPB ReviewThe CFPB or the Consumer Financial Protection Bureau is a federal agency that is designed to protect you the consumer from abuse in the world of finances. What we want to do is explore if they’re actually doing their job, or if they’ve dropped the ball and let payday loans run rampant.

As a consumer protection agency, it seems that they CFPB would be able to do more for the consumer when it comes to a service like payday loans. The industry is riddled with predatory practices, and it’s built to trap consumers in a cycle of endless payday lending. It’s not going to help someone out of their financial dilemma, but rather extend the problem into the indefinite future because they’ll never be able to pay the loan back and then make it to their next payday.

Some states have banned payday lending, while others have enacted laws that make it financially impossible for a payday lender to practice in those states. The payday companies have lobbyists to try to press their interests, but it seems like a Federal mandate needs to be in place that makes it difficult for these lenders to take advantage of so many people.

CFPB Review – Are They Stopping Payday Lenders?

CFPB offers financial advice to consumers, but education is not going to work when people are in a financial jam and are desperate for money. They need a source of fast money that doesn’t rake them over the coals and make it so they’re stuck paying fees for several months or even years after they initially take out the money.

Mandate Installment Options
All the CFPB would need to do is make it so every payday lender must offer an installment option to borrowers. This would make it so they can pay the loan off over time, just like a loan from the bank. Some borrowers would take that option, while other borrowers would have the choice of paying all the money back and then taking it back out again later.

Taxpayer Dollars
As a federally funded agency the CFPB is paid for by the same people that also have to pay the high fees at payday lending establishments. It seems that if any agency is poised to make a change in the payday loan industry it would be this one. They obviously recognize that payday lending is not smart, and a potential threat to consumers, because they advise against it. But that is a pretty weak way to protect the consumer, and it would be better if they would just put certain measures in place to help people out.

Topics of Reform
After setting it up so that borrowers can pay in installments they would then have to direct their attention to how much a borrower is allowed to take out. In most cases a lender will allow a borrower to take out more than they can afford to repay on their payday and still live and survive until their next payday. By reducing the amount a person can take out they will drastically cut down the number of people that run into payday loan trouble each year.

They can also have it so that businesses are encouraged to create products that are more consumer friendly, rather than allowing them to come up with a business model that relies on screwing people over. Payday lenders don’t make their money by the person that takes out just one loan and pays it back on time never to return. They make their bread and butter from the people that show up every week and pay their loans back just to take the money out again.

Our Recommendation
The CFPB should take more immediate steps to help borrowers in these tough financial times, and there needs to be some serious reform to the payday loan industry. As a federally funded agency they owe it to the American people to do more than what they’ve been doing. There’s just no excuse for why things have gone on this long, why they were allowed to happen in the first place, and why the American consumer has been forced to pay the silly fees associated with payday lending.

Add Your Own Experience to Our CFPB Review Below

VN:F [1.9.20_1166]
Rating: 0.0/5 (0 votes cast)
VN:F [1.9.20_1166]
Rating: 0 (from 0 votes)
You May Also Like:

Leave a Comment