September

26, 2016


The Honorable Richard Cordray, Director
Consumer Financial Protection Bureau
1700 G Street, NW
Washington, DC 20552

RE: Proposed Rule on Payday, Vehicle Title, and Other High-Cost Installment Loans,
Docket ID Number: CFPB-2016-0025 or RIN 3170-AA40

Dear Mr. Cordray,

Thank you for the opportunity to file this comment in response to the Consumer Financial Protection
Bureaus (CFPB) proposed rule on payday, vehicle title, and other high cost installment loans. We
believe that this rule is critically important to the financial well-being of hardworking Americans who
are being targeted by predatory lenders that seek to profit by trapping consumers in difficult to
escape cycles of debt.

For more than two months, the CFPB has been receiving comments from those both in favor of and
opposed to this rule. While many of these comments may seem genuine, even heartfelt, we write to
you today with hope that comments opposing this rule will receive greater scrutiny. We make this
serious request for two primary reasons:

1) The payday lending industry and the shadowy astroturf front groups supporting its
objectives have a history of deceptive practices when it comes to pushing lawmakers to
support or oppose regulations.

2) Hundreds of comments that have already been received by the CFPB from borrowers in
opposition to this rule, although designed to look personal and authentic, include the
exact same phrasing, thus calling into question their authenticity.

It should come as no surprise that the payday lending industry might attempt to influence the CFPBs
rulemaking process through potentially underhanded means.

In state-based payday lending campaigns, industry groups have resorted to questionable tactics in an
attempt to influence state lawmakers and achieve their regulatory goals. In January, the pro-payday
group Arizona Financial Choice Association organized a purported letter-writing campaign of
borrowers supporting SB 1316, legislation that would legalize predatory loans with triple digit
interest rates in the state. According to State Representative Debbie McCune Davis, who requested a
State Attorney General investigation into the industry-backed effort, when letter signers were
contacted and told exactly what the bill would entail, many fully opposed it. Signers also admitted
that they were told to sign the letters as part of their loan application. Worse still, some did not recall
signing the letters at all.1

Rep. McCune Davis Asks AG to Investigate Arizona Financial Choice Association for Misrepresentation, Arizona House
Democrats website, March 15, 2016, accessed September 13, 2016, http://www.azhousedemocrats.com/2016/03/repmccune-davis-asks-ag-to-investigate.html. Of special note is the letter from Rep. McCune Davis to Attorney General Mark
Brnovich, dated March 15, 2016: https://4.bp.blogspot.com/-M26kYJrJQEY/VuhrW4ZguhI/AAAAAAAACX0/W7LPNpj9gIKbDvXN_kXVi8ISCnSevmOA/s1600/Letter+to+AG.png.
1

1220 L Street NW, Suite 100/364 Washington, D.C. 20005-4018

(855) ALD-PRGS toll-free (202) 205-5767 fax alliedprogress.org


Such a history of industry-sanctioned deception should be taken into consideration when weighing
the comments received by the CFPB in opposition to this rule. Similarly, the background of those
running these industry-backed organizations should also be considered.

For the better part of a year, while the CFPB was preparing its rule to rein in the worst abuses of
payday, vehicle title, and other high-cost installment loans, the industry-supportive astroturf group
Protect Americas Consumers was pummeling the bureau with a barrage of inaccurate television and
digital ads around the country.2 The only person publicly affiliated with the group, its CEO Steve
Gates, once worked for an organization that was caught faking grassroots activity, even forging
letters to members of Congress.3 That phony activism was subcontracted to Lincoln Strategy Group,
which also appears to be running the anti-CFPB astroturf operation for Protect Americas
Consumers. 4 Lincoln Strategy Group is run by Nathan Sproul, whos companies have been
investigated in multiple states and by the FBI for violating voter registration laws.5

As the Cleveland Plain Dealer reported in August, there is growing concern that payday loan
borrowers are being pressured by lenders into submitting comments to the CFPB that oppose the
proposed rule. The fact that borrowers are being asked to submit comments opposing the rule as
part of the loan process, according to the Plain Dealer, suggests that the letter-writing involves an
element of coercion or pressure, directly or implied.6

To be clear, a variety of comments have been received by the CFPB, including:

Comments via signed petitions using the same comment language
Comments via signed petitions using altered but similar comment language
Comments directly to the CFPB on behalf of organization/organizations
Comments directly to the CFPB from borrowers that appear to be unique

It is that last category of comments that a cursory review reveals to be most troublesome. The CFPB
has received hundreds of individually submitted comments opposing the proposed rule that appear
on first glance to be unique but upon further examination, include many of the exact same phrases.
Furthermore, when these repeatedly used phrases are entered into search engines, they return no
matching results.

Reality Check: Shadowy Front Group Running Grossly Misleading Ads About CFPB Pay and Office Construction Costs, Allied
Progress website, February 24, 2016, accessed September 13, 2016, http://aldpr.gs/1T7pt8l; Latest Protect Americas
Consumers Ads Targeting Senators Riddled with Misinformation, Allied Progress website, April 11, 2016, accessed
September 13, 2016, http://aldpr.gs/1VP93kw; and Shady Astroturf Group Creates Anti-CFPB Attack Ad About Pretend
Donors to Pretend Campaign, Allied Progress website, May 4, 2016, accessed September 13, 2016, http://aldpr.gs/1VK82vC.
3 Isaac Arnsdorf, Emily Kopp, and Noah Weiland, More Anti-CFPB Shenanigans, Politico, January 7, 2016,
http://www.politico.com/tipsheets/politico-influence/2016/01/more-cfpb-shenanigans-212055 - ixzz3ywx8M6sj.
4 Coal Lobbys Purest Form of Grassroots Delivered by GOP Voter Fraud Company, Think Progress, August 7, 2009, accessed
September 13, 2016, http://thinkprogress.org/economy/2009/08/07/55143/sproul-coal-fraud/; and Isaac Arnsdorf et al., PI
Exclusive: Uncovering the Astroturf Firm Behind the CFPB Attack Ads, Politico, May 19, 2016,
http://www.politico.com/tipsheets/politico-influence/2016/05/pi-exclusive-unmasking-the-astroturf-firm-behind-the-cfpbattack-ads-214391.
5 Coal Lobbys Purest Form of Grassroots; Craig Harris, Arizona Political Operative Sproul in Spotlight, Arizona Republic
October 18, 2012, http://archive.azcentral.com/news/politics/articles/20121009arizona-political-operative-sproulspotlight.html. Michael Walsh, FBI investigating voter registration company Strategic Allied Consulting for fraud, New York
Daily News, November 3, 2012, http://www.nydailynews.com/news/politics/fbi-investigating-voter-registration-companyfraud-article-1.1196220; Stephanie Saul, G.O.P. Operative Long Trailed by Allegations of Voter Fraud, New York Times,
October 5, 2012, http://www.nytimes.com/2012/10/05/us/politics/nathan-sproul-a-republican-operative-long-trailed-byvoter-fraud-claims.html; Patrick Marley, State GOP linked to dicey firm; Party briefly contracted with group under
investigation. Milwaukee Journal Sentinel, October 14, 2012 and Eli Stokols, Colorado Girl Registering Only Romney Voters
Tied to Firm Dumped by RNC Over Fraud, KDVR/Fox 31 Denver, September 28, 2012,
http://kdvr.com/2012/09/28/colorado-gop-dumps-firm-with-ties-to-voter-fraud/.
6 Stephen Koff, Payday Lenders Get Thousands of Borrowers to Complain to Government about Rules Meant to Protect Them,
Cleveland (OH) Plain Dealer, August 22, 2016,
http://www.cleveland.com/metro/index.ssf/2016/08/ohio_payday_lender_has_borrowe.html.
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The payday lending industrys special interest trade group, the Community Financial Services
Association (CFSA), recently chastised the CFPB in a press release bearing the accusatory headline,
CFPB Buried, Ignored Positive Payday Loan Customer Tell Your Story Testimonials It Requested.7
What the CFSA neglected to include in its release is the startling fact that many of the supposedly
personal stories submitted to the CFPB included some of the exact same sentences.8 For example:

There are no other products out there that give you the freedom that a pay day loan can
give you," appears in at least forty-three different stories.

It was a very efficient process and definitely the most reasonable option for me, appears in
at least eighteen different stories.

Medical bills can be very difficult to get under control and are very confusing. This loan was
a great solution for me, appeared in at least twenty-eight different stories.

After doing a little research online, I found that payday loans were exactly the option I
needed. I was able to walk in and sit down with someone who explained everything easily to
me and I got my money in no time, appeared in at least fifteen different stories.

To avoid bouncing a check, I turned to a loan to help pay some bills. I found that it was a
great choice for me and I was able to pay my power bill on time and without penalty,
appeared in at least forty-nine different stories.

These can really put a hurt on our wallet but after getting a short-term loan, we do not have
to worry as much about the payments and can focus on staying healthy, appeared in at least
thirty different stories.

Ive recommended pay day loans to people and used them myself, and everyone Ive talked
to has had a good experience and is grateful for the small loans they get. Im not sure what
many of us would do if we could not take out these loans any more. The government should
leave them alone since they help so many families, appeared in at least seventeen different
stories.

I work long hours and do not have time to get to a regular bank or wait for my paycheck to
clear so I can pay bills. I do not have confidence that the bank will work with me when Im in
a pinch for cash, but I know that a payday loan shop will. They get that I need money right
away and will pay the advance back as soon as I can, without a bunch of paperwork or
surprises, appeared in at least twenty-two different stories.

The stories submitted are not identical. They do not appear to be the result of an online petition. In
fact, the CFPBs Tell Your Story portal does not offer any sample language.9 Instead, these stories
are largely unique but include a suspiciously significant number of identical sentences and
paragraphs. It is important to note that our review of these CFSA-championed stories was not
comprehensive. A more thorough examination would undoubtedly turn up many more examples of
identical phrasing appearing in these purportedly personal story submissions.

CFPB Buried, Ignored Positive Payday Loan Customer Tell Your Story Testimonials It Requested, September 6, 2016,
Community Financial Services Association of America website, accessed September 13, 2016, http://cfsaa.com/ourresources/communications/recent-news/article-detail/newsid/131.aspx.
8 Tell Your Story submissions from January 21, 2016, Consumer Financial Protection Bureau website, accessed September
13, 2016,
https://gallery.mailchimp.com/24e3495ba138af4c830a9e396/files/CFPB_TellYourStorySubmissions_CFSAFOIA.pdf.
9 Tell Your Story submission portal, Consumer Financial Protection Bureau website, accessed September 13, 2016,
https://help.consumerfinance.gov/app/tellyourstory.
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Like the Tell Your Story submissions praising payday loans, many of the comments submitted in
opposition to the CFPBs proposed rule include identical phrasing. Again, these submissions are not
the result of an online petition. They were submitted independently and individually to the CFPB.
When the phrasing is entered into a search engine it returns no matches. So, it is not as if these
individuals are finding these sentences online and independently deciding to use them in their
respective comments.

Take the following comment, for example. Nothing about it is unique. Every sentence appears in
other comments allegedly submitted to the CFPB by other people.10

From:
Miko Jaleel
To:

CFPB_FederalRegisterComments
Subject:
docket number CFPB-2016-0025
Date:
Wednesday, July 13, 2016 9:14:59 PM

Even though I had insurance to help cover some of the costs of my car repair, I still needed
some extra money to get a rental. Payday loans gave me the money so I could afford it and
I'm glad they were able to help me.

I can afford my phone bill most of the time, but there are times that I have extra costs that do
not fit my budget. To keep my budget on track, I rely on pay day loans.

Without these loans, I would not have anywhere else to go when the bills get too high. I'm
afraid that this limit will leave me with no options if I'm in a bind. The new CFPB rules will
only hurt me and won't solve anything.

Shutting down payday loan stores would hurt the many families that rely on these loans in
order to stay out of bankruptcy. It is important to keep this loan option as it is.

Miko Jaleel

When each of the sentences in this sample comment is searched in the regulations.gov comment
database for the CFPBs proposed rule, they return numerous examples of the exact same sentence
being used in comments submitted by other individuals:

"Even though I had insurance to help cover some of the costs of my car repair, I still needed
some extra money to get a rental. Payday loans gave me the money so I could afford it and
I'm glad they were able to help me, appears in at least 101 other submitted comments.11

"I can afford my phone bill most of the time, but there are times that I have extra costs that
do not fit my budget. To keep my budget on track, I rely on pay day loans, appears in at least
sixty-nine other submitted comments.12

"Without these loans, I would not have anywhere else to go when the bills get too high. I'm
afraid that this limit will leave me with no options if I'm in a bind, appears in at least twenty
other submitted comments.13

Comment Sumbitted by Miko Jaleel on the CFPB Proposed Rule: Payday, Vehicle Title, and Certain High-Cost Installment
Loans, Regulations.gov website, accessed September 13, 2016, https://www.regulations.gov/document?D=CFPB-20160025-6334.
11 Docket Browser Results (101) from search of Comments on CFPB-2016-0025, Regulations.gov website, accessed September
15, 2016, http://bit.ly/2c8Vmid.
12 Docket Browser results (69) from search of Comments on CFPB-2016-0025, Regulations.gov website, accessed September
15, http://bit.ly/2c770VP.
13 Docket Browser Results (20) from search of Comments on CFPB-2016-0025, Regulations.gov website, accessed September
15, 2016, http://bit.ly/2cEcj4O.
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"The new CFPB rules will only hurt me and won't solve anything, appears in at least eighty
other submitted comments.14

"Shutting down payday loan stores would hurt the many families that rely on these loans in
order to stay out of bankruptcy, appears in at least fifty other submitted comments.15

"It is important to keep this loan option as it is," appears in at least ninety-four other
submitted comments.16

This exercise could be repeated time and again to turn up hundreds, if not thousands of other
examples of supposedly personal and unique comments submitted directly to the CFPB in opposition
to its proposed rule that include at least some of the exact same sentences found in the comments of
other individuals.

Who is to blame for these alarming irregularities? Perhaps a recent expos in VICE has the answer.
According to the report, months before [the CFPB] proposed a new rule threatening the profits of
exploitative payday lenders across America, the industry's leaders gathered at a posh resort in the
Bahamas to prepare for war. During a breakout session titled Take Action in the Rulemaking
Process Comment Period," attendees were told that a team of three full-time writers had been
retained to assist with comment writing. By deluging the CFPB with individual comments, the author
goes on to note, lenders could keep the payday loan party going and force the agency to wade
through hundreds of thousands of comments. As Dennis Shaul, head of the industrys primary trade
group, explained, the result is a bogged down CFPB.17

It is the responsibility of the CFPB to evaluate the comments it receives concerning its proposed rule
on their merits. Based on the evidence Allied Progress has unearthed of payday lending industry
front groups participating in questionable advocacy tactics, and of supposedly personal and unique
industry supportive comments being submitted with the exact same phrasing found in other
submissions, it is clear that additional scrutiny over comments opposing the CFPBs proposed rule is
warranted.

Ultimately, we want this rule to protect Americans from predatory lending practices that could trap
them in cycles of debt and keep them from financial stability. In all of our engagements concerning
this rule, we have worked to amplify the real voices of hardworking Americans struggling to make
ends meet. Unfortunately, we cannot say the same for the payday lending industry.

Thank you for your thoughtful consideration of our comment. If you have any questions or need
additional information, please dont hesitate to contact me directly at karl@alliedprogress.org or
855-253-7747.

Sincerely,

Karl Frisch
Executive Director
Allied Progress

Docket Browser Results (80) from search of Comments on CFPB-2016-0025, Regulations.gov website, accessed September
15, 2016, http://bit.ly/2c78Q9g.
15 Docket Browser Results (50) from search of Comments on CFPB-2016-0025, Regulations.gov website, accessed September
15, 2016, http://bit.ly/2cHa2Ti.
16 Docket Browser Results (94) from search of Comments on CFPB-2016-0025, Regulations.gov website, accessed September
15, 2016, http://bit.ly/2c78TSu.
17 David Dayen, How Predatory Payday Lenders Plot to Fight Government Regulation, VICE, August 18, 2016,
http://www.vice.com/en_ca/read/payday-lenders-consumer-protection-strategy-atlantis-bahamas.
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