The Consumer Financial Protection Bureau convened the agency's first field hearing in Alabama on Thursday, calling for input on payday lending.
The CFPB's field guide “Short-Term, Small-Dollar Lending Procedures,” which will be used to ensure that payday lenders adhere to federal consumer financial laws, was also released on Thursday. The guide contains examination procedures used in assessing payday lenders.
CFPB Director Richard Cordray said that though payday lending is necessary, the agency will be keeping a close eye on the institutions.
“We recognized the need for emergency credit. At the same time, it is important that the products actually help consumers, rather than harm them,” Cordray said at the hearing. “Now, the bureau will be giving payday lenders much more attention.”
Payday loans, which are usually used as a bridge between pay or benefits checks, have become much more commonplace over the past 20 years. Since the establishment of the CFPB, payday lenders, both bank and non-bank, can now be supervised.
Risks to consumers, as well as oversight methods and business volume, will be part of the CFPB's payday lending supervisory program, according to the CFPB press release.
Payday lenders will regularly be contacted and followed-up by the CFPB to ensure that they are operating within the scope of federal consumer financial laws.