Normally we do not post about private conversations we have with CFPB staff. However, I have received CFPB staff approval to report on a few conversations I had last week concerning the CFPB’s payday lending studies.
I infer from my conversations that the CFPB believes, preliminarily, that at least some meaningful conclusions can be drawn from online payday loan data provided by Clarity Services, including information from credit bureaus bearing on the creditworthiness over time of payday borrowers. The CFPB owns rights to use this data and presumably could arrange to share it with the industry and/or other interested parties, if it chose. However, it does not intend to do so at present.
The CFPB has neither confirmed nor denied the existence or nature of non-public supervisory activity in the payday space. However, it is widely reported that it engaged in a round of exams last year, which included most if not all of the largest storefront lenders. I infer from last week’s conversations that the CFPB is using the exam data it obtained to analyze storefront payday borrowing patterns. However, this data has not been supplemented by credit bureau data and accordingly will not bear directly on the consumer impact of differing storefront borrowing patterns. Moreover, any examination data collected by the CFPB is confidential and will not be made available to the industry.
Meanwhile, the CFPB is in a dialogue with the storefront industry about the possible creation of a data set that would be voluntarily assembled by the industry and made available to both the CFPB and industry researchers.