A member of Congress has requested an investigation into alleged fake public comments in connection with a new rule that puts more restrictions on the payday lending industry.
Numerous comments submitted to the Consumer Financial Protection Bureau in opposition to the payday lending rule “appear to be fake, using stolen or obsolete email accounts,” a news release from the Democrat Committee on Energy and Commerce states.
The new payday lending rule aims to “curb predatory lending practices,” said U.S. Rep. Frank Pallone, Jr., D-N.J., who has asked the Consumer Financial Protection Bureau to investigate the alleged fake comments.
A recent Wall Street Journal report “uncovered millions of fraudulent comments” made to numerous federal agencies, the news release stated. According to the newspaper. some of the comments came from a web address used by the Community Financial Services Association of America (CFSA), which represents payday lenders, the release adds.
CFSA told Corinth Today that it takes the allegations seriously and is looking into them.
“There is authentic and overwhelming opposition to the rule, which would restrict access to credit for millions of Americans,” CFSA said in an email. “Of the more than one million comments opposed to the rule, hundreds of thousands were personal handwritten letters. Other customers chose to use an online portal to electronically submit a customized letter that expressed their views on the CFPB’s proposed rule.”
CFSA said it provided extensive training materials to its member companies and made it clear that sending a comment was voluntary. Moreover, an electronic portal asked for customers’ legal consent numerous times when a comment letter was created, CFSA added.
The FBI and the Department of Justice have also been asked to conduct “formal inquiries” into whether fake public comments violate federal law.
New Payday Lending Rule
The new federal payday lending rule says it is “an unfair and abusive practice” for lenders to make certain loans with balloon payments without reasonably determining that consumers have the ability to repay the loans according to their terms.”
Certain loans with annual percentage rates of more than 36 percent that are repaid from a customer’s account are also addressed by the new rule. It is an “unfair and abusive practice to attempt to withdraw payment from a consumer’s account after two consecutive payment attempts have failed, unless the lender obtains the consumer’s new and specific authorization to make further withdrawals from the account,” the new rule adds.