The CFPB made changes to an agency white paper on payday loans and deposit advance products in response to a Request for Correction (RFC) filed under the Data Quality Act (DQA) by the Community Financial Services Association (CFSA). CFPB’s response corrected the agency’s use of the term “wire transfer” while rejecting other issues raised in the petition. The CFPB’s DQA response stated,
The White Paper used the term in this broad manner to include money transfers, which are used as a method of payment for online payday loans. We do, however, recognize that “wire transfer” is often used in a more technical sense to refer to a specific kind of bank-to-bank electronic transfer of funds that does not include money transfers. Additionally, with regard to the repayment process, the White Paper intended “the lender submits the debit authorization to the consumer’s depository institution,” which is imprecise phrasing, to mean that the lender submits an ACH debit entry to its depository institution or processor to obtain repayment from the consumer’s account at her depository institution. To help avoid any misunderstanding by readers, the CFPB has posted a clarification on its website.
Read CFSA DQA petition here.
Read CFPB response here.