Guidelines hint at future regulation of lead providers and other marketers as "larger participants" under Dodd-Frank Act

In conjunction with remarks this afternoon by Richard Cordray, Director of the Consumer Financial Protection Bureau (CFPB), at a much-heralded field meeting on payday lending, the CFPB has released an examination procedure for short-term, small-dollar lending. The guidelines, available here, set forth the agency’s examination objectives and provide an outline of the “modules” that examiners will use in five examination areas: 1. Marketing; 2. Application and Origination of Loans; 3. Payment Processing and Sustained Use; 4. Collection, Accounts in Default, and Consumer Reporting; and 5. Third-Party Relationships (i.e., privacy and safeguards). In addition to providing a practical guide for what to expect during an examination, the guidelines add color to the question surrounding the new agency’s enforcement of the “unfair, deceptive or abusive” prohibition set forth in the Dodd-Frank Act. Additionally, they hint at future regulation of lead providers as a “larger participant” in the consumer finance market, as that term is defined by Dodd-Frank.