by Jeff Sovern
An American Banker article this week (behind paywall) noted that payday lending has been the subject of only one percent of the complaints to the CFPB complaint database. According to the article:
"The 1% figure for payday is very low… I think the CFPB is probably surprised, or at least disappointed," said Alan Kaplinsky, who heads the consumer financial services group at Ballard Spahr. "I think the CFPB would like to see a much higher percentage to support their upcoming payday loan rulemaking."
But I'm not sure how signicant the percentage of complaints is. I'm out of the office at the moment and so can't confirm this, but my recollection is that research into consumer complaints has shown that less-educated and lower-income consumers are less likely to complain than others. Thus, what we may be seeing is merely a function of that effect, as payday borrowers are more likely to have lower incomes, and, I suspect, have less education. It would be interesting to know what percentage of the complaints from low-income consumers concern payday lending. It would also be useful to know whether the types of transactions garnering more complaints are engaged in by more consumers. If it is true, for example, that many more consumers have credit cards than borrow from payday lenders, we would expect to see more complaints about credit cards.