When agencies of the federal government are going to issue a rule, they put forward a draft and have what is called a public comment period.
During this comment time, people with real concerns about the rule that is being proposed can write in support of it or in objection to it. Then the agencies close the comment period and are required to respond to the significant objections before issuing the rule.
The process can be a good one for raising real concerns about how rules might impact folks in the real world. However, it’s also prone to abuse. Activists often engage in “stuffing the box,” and they may have taken that to a whole new level in the case of the Consumer Financial Protection Bureau’s (CFPB) proposed revision to the Obama-era Small-Dollar Loan Rule. With the proposed revision the CFPB is keeping credit available for low-income Americans with limited options.
The 2017 Payday Lending rule, which hadn’t been fully implemented yet, would force so-called payday and other short-term lenders to verify all kinds of things before they can hand over money to folks who need it immediately.
The Obama-era rule would make it much harder for people who need the money quickly to get access to it in the name of protecting them, with little thought about what those people will do when they can’t get the money from legitimate short-term lenders. For instance, they may get it from loan sharks instead, who are known to quite literally beat the loan interest out of people.
One thing standing in the way of the proposed revision is the massive comment stuffing that has gone on by so-called consumer activists. The same phrases crop up over and over in comments, not just dozens but hundreds and even thousands of times, which shows how coordinated the effort to stop the revision truly is.
The phrase “borrowers who are preyed upon by abusive loan sharks” was found 1,891 times in a search of those comments. Which is funny, because the old rule would only boost actual loan sharks.
The phrase “forced to take out high-cost loan after loan just to make ends meet” recurred 1,887 times.
And the stock outrage phrase, “I was disgusted to hear that, under Kathy Kraninger’s new leadership, the Bureau is doing just the opposite and actually throwing borrowers to the sharks by destroying its already proposed rule,” is found 1,861 times.
It’s possible that a few people used the proposed language encouraged by consumer activists, even a few dozen, but 1,800? Something smells funny here. The CFPB should call this what it is, concern spam, and not treat it as serious comments that are in need of reply.