The Consumer Financial Protection Bureau (CFPB) is now accepting complaints from borrowers encountering problems with payday loans. Payday loans, also known as “cash advances” or “check loans,” are often short-term, small-dollar loans, generally for $500 or less.
“Before the Consumer Bureau, consumers who had trouble with payday lending products had few places to turn,” said CFPB Director Richard Cordray. “By accepting consumer complaints about payday loans, we will be giving people a greater voice in this market.”
Payday loans are often described as a way for consumers to bridge a cash flow shortage between paychecks or the receipt of other income. They can offer quick access to credit, especially for consumers who may not qualify for other credit, but can come at a high cost. Many payday loans are for small-dollar amounts that must be repaid in full in a short period of time. Payment is generally due the next time the borrower gets paid—meaning the loan may require repayment in only a few weeks. Many lenders require that borrowers grant them advance access to checking accounts in order to repay the loans.
Payday lenders have sprung up across the country over the past 20 years, beginning in storefront locations. Many payday loans now are also offered through the Internet. The CFPB has authority to oversee the payday loan market and began its supervision of payday lenders in January 2012. The CFPB has taken a number of steps to learn more about the marketplace for payday loans, and released a report on payday loans earlier this year. That report found that payday products can lead to a cycle of indebtedness for many consumers.
Consumers can submit payday loan complaints to the Bureau about:
►Unexpected fees or interest
►Unauthorized or incorrect charges to their bank account
►Payments not being credited to their loan
►Problems contacting the lender
►Receiving a loan they did not apply for
►Not receiving money after they applied for a loan
The CFPB began taking consumer credit card complaints on July 21, 2011, and now accepts complaints about mortgages, bank accounts and services, private student loans, consumer loans, credit reporting, debt collection, and money transfers. The Bureau requests that companies respond to complaints within 15 days and describe the steps they have taken or plan to take. The CFPB expects companies to close all but the most complicated complaints within 60 days. Consumers are given a tracking number after submitting a complaint and can check the status of their complaint by logging on to the CFPB Web site.