By Alexandra Alper
WASHINGTON (Reuters) – Payday lenders facing oversight from the new consumer protection agency are warning that tough regulations may push customers into the arms of unscrupulous online lenders, in a pitch for lighter, or at least equal, new rules.
The storefront payday lending industry has been slowly bleeding over the last few years as states, until now the industry’s major regulators, have enacted tougher laws designed to protect consumers from the controversial short-term high-interest loans.
But lenders say the tough new laws have pushed consumers into the murky world of lightly regulated online lenders, many of which have been accused of aggressive collection practices, unauthorized charges, and violations of disclosure laws.
Storefront lenders fear the Consumer Financial Protection Bureau could unleash new regulations that strip their profitability while letting online competitors flourish. The argument is strikingly similar to the one that traditional banks have used to encourage federal regulation of payday lenders.
Payday lenders will get a formal chance to deliver their pitch on Thursday when the CFPB holds a field hearing about the industry in Birmingham, Alabama.
“Regulators sometimes with good intentions don’t take into account that there are true issues that come up in peoples’ lives where they need access to
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