The Competitive Enterprise Institute released a letter sent to the Office of Information and Regulatory Affairs (OIRA) on January 11, 2018 asking the Consumer Financial Protection Bureau’s (CFPB) to reject the payday lending rule because it violates the law.
“CFPB’s Payday Lending Rule violates the Paperwork Reduction Act, a longstanding law aimed at controlling regulatory burdens,” said CEI General Counsel Sam Kazman. “As CEI demonstrated in our letter, the Payday Lending Rule would lead not to paperwork reduction, but to paperwork proliferation on a massive scale. We welcome the CFPB’s subsequent decision this past Tuesday to reconsider the rule, and we hope the bureau will pay more attention to this enormously expensive issue.”
In the letter, CEI explains how the CFPB failed to consider the huge paperwork burden that its new rule would impose on people and businesses. The Paperwork Reduction Act of 1995 was passed by Congress to protect people from regulators needlessly inflicting such big costs on people. As you know, the rule in its current form would effectively block consumer access to small-dollar loans.
“When the paperwork burdens for small-dollar loans are greater than mortgages or large credit card lines of credit, the burden is far from reasonable,” the letter states. “And yet these extensive burdens are required even for a $50 loan.”
Related Report: How the Consumer Financial Protection Bureau’s Payday Loan Rule Hurts the Working Poor by Daniel Press