July 17, 2017 | Access to Credit
Washington, D.C. – New survey research released today by premier polling firms Global Strategy Group (D) and the Tarrance Group (R) suggests that misperception around payday loans, rather than fact and experience, is driving conventional wisdom and fueling regulatory action and political criticism of the product. In fact, both borrowers and voters are concerned about additional regulations that would restrict access and the ability for consumers to choose payday products.
Contrary to the claims of regulators and consumer advocates, the survey research shows that borrowers appreciate having the payday loan option and fully understand the loan terms. When compared with banks, payday customers give the payday lenders higher marks for treating them fairly.
“It’s clear from this survey research that the CFPB’s misguided effort to regulate payday loans has completely left out the most important voice, the payday loan customer,” said Dennis Shaul, CEO Community Financial Services Association of America (CFSA) which commissioned the survey. “The CFPB has not addressed the reality that its new regulations will restrict access to credit for the millions of households that use payday loans to responsibly manage budgetary shortfalls and unexpected expenses.”
The Consumer Financial Protection Bureau (CFPB) is expected to announce its regulations on payday loans and short term credit in the coming weeks or months. In March 2015, the bureau released its rule concepts to regulate payday loans and other forms of short-term credit. Based on these rule concepts, many believe that a significant number of payday lenders will be forced to cease operations.
Summary of Survey Research Findings
People who have used payday products have much better perceptions of the product than voters, appreciate having the payday loan option, and fully understand the loan terms.
This is because most voters live in a very different financial world than payday loan borrowers.
But both borrowers and voters are concerned about additional regulations that would restrict access and the ability for consumers to choose these products.
Global Strategy Group and The Tarrance Group conducted two telephone surveys on behalf of the Community Financial Services Association of America (CFSA). First, a nationwide survey of 1,000 likely 2016 voters between January 9 and 13, 2016. The margin of error at the 95% confidence level is +/- 3.1%. The margin of error on sub-samples is greater. Second, a nationwide survey of 1,000 payday loan borrowers, including oversamples of 321 African American payday loan borrowers and 300 Hispanic payday loan borrowers. The survey was completed between January 12 and 19, 2016. The margin of error for the total sample at the 95% confidence level is +/- 3.1%. The margin of error on oversamples and sub- samples is greater.