Report Accuses CFPB Employees of Manipulating Research When Revising Payday Lending Rule

A report from The New York Times is accusing individuals at the Consumer Financial Protection Bureau of manipulating “the research process to justify altering” its payday lending rule, based on a 14-page memo that was written by an economist at the agency on his last day on the job last year. The report also revealed that the CFPB is expected to release the updated payday lending rule this week.

The Times received the memo from a current employee at the agency, it said in the report.

Among the claims made by the economist, Jonathan Lanning, who left the CFPB to work at the Federal Reserve Bank of Chicago, were that staff economists were pressured to “water down their findings on payday loans and use statistical gimmicks to downplay the harm consumers would suffer” if the restrictions included in the original payday loan rule were repealed.

A spokesman for the CFPB said in the report that the Bureau has “a fair, transparent and thorough” process for making rules. “The comments received and evidence obtained are all taken into consideration before issuing a final rule,” he said. “The director is the ultimate decision maker and ensures that the decisions taken are justified publicly, as is required by law.”

The payday lending rule was originally proposed by the CFPB back in 2016, under former director Richard Cordray. The CFPB then announced in a Notice of Proposed Rulemaking in 2019 that it was revising the proposed rule, which included removing a provision that would require lenders to determine a borrower’s ability to repay a loan prior to originating it.

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