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How the CFPB Protects Consumers Using Payday Loans

Written by: Kristy Welsh

Last Updated: August 30, 2017

Though they're advertised as a way to help consumers make ends meet until their next payday, cash advances from payday lenders almost always do their borrowers more harm than good. Fortunately, the Consumer Financial Protection Bureau (CFPB) exists to supervise financial products and services, payday loans among them.

CFPB Regulates the Payday Loan Industry

For 20 years, payday lenders operated with virtually no oversight. That is until January 2012 when the CFPB assumed formal supervision of the payday loan industry.

In this role, the CFPB is tasked with ensuring that payday lenders are in line with rules and regulations. If and when they are found in violation, it is the CFPB's job to step in.

For instance, the CFPB has taken enforcement action against two of the largest payday lenders in the country:

Both Cash America and ACE Cash Express were also fined $5 million each, which goes into the CFPB Civil Penalty Fund.

CFPB Conducts Studies of the Payday Loan Industry

It's no secret payday loans are an expensive last resort for consumers who can least afford them. But nothing can shock sense into consumers and lawmakers like hard numbers that speak to just how dangerous these debts can be.

For instance, the CFPB's March 2014 study found that:

This data can be used to educate consumers, as well as to inform the writing of new rules and regulations that can better protect consumers from this too often devastating cycle of debt.

Educates Consumers on Payday Loans

The CFPB maintains an extensive database of information on all sorts of consumer financial products and services in its Ask CFPB section.

On the subject of payday loans, you'll find answers to questions like:

If you have a question, go to Consumer Finance Protect Bureau, click on "Get Assistance" then select "Ask CFPB" and search "payday loans."

CFPB Accepts Payday Loan Complaints

Have you had trouble with a payday loan? Unexpected fees or interest? Unauthorized or incorrect charges to your bank account? Payments not being credited to your loan? Problems contacting the lender? Receiving a loan you did not apply for? Not receiving money after you applied for it?

When you submit a complaint to the CFPB:

Note, the CFPB also shares complaints with state and federal law enforcement agencies, and sends a complaint report to Congress twice a year. Your complaint may also be posted to the Consumer Complaint Database (minus any personally-identifying information).

Whatever the issue relative to your payday loan, the CFPB wants to hear about it.

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