b'Payday & Small Dollar LendingKey Trends consumer did not pay the loans. CFPB examiners also found that although a reasonable borrower Although we predicted in 2020 that the CFPB would becould understand the letters to mean that the lender aggressive in launching investigations and enforcementhad decided it would sue if a borrower did not make actions in the payday lending space, Goodwin onlypayments as required by the letter, the lenders in fact monitored 10 publicly announced actions concerninghad not made such a decision, and in most instances payday, installment, or small dollar lending in 2021. Fivedid not follow through with suit. Second, the CFPB of 2021s actions were brought by the CFPB, two wereobserved that lenders engaged in a deceptive brought by the FTC and alleged violations of the FTCAact or practice in violation of the CFPA when they and UDAP, as well as the Telemarketing Act, TSR, TILA,falsely represented on storefronts and in photos on EFTA, and Regulation E, and one by the state of Illinois.proprietary websites that they would not check a As shown below, 2021 represents a decrease in publicconsumers credit history because lenders in fact used enforcement activity in the small dollar lending space, asconsumer reports from at least one agency in their Goodwin previously monitored 17 actions in 2020, determination regarding whether to extend credit to 13 actions in both 2018 and 2019, and 26 actions in 2017.the consumer. Finally, the CFPB found lenders made Despite the noted decrease in enforcement in 2021, thedeceptive representations of repayment options to CFPB continues to investigate and scrutinize this area.borrowers by presenting fee-based refinance options Both then-acting Director Uejio and newly-appointedto struggling borrowers while withholding information Director Chopra have indicated that payday and smallabout contractually available no-cost repayment plan dollar lending will be among the areas of focus underoptions, causing many consumers [to] enter[] into fee-the current administration. Most notably, under thebased refinances despite being eligible for a no-cost leadership of then-acting Director Uejio and currentrepayment option. Director Chopra, the CFPB made clear that it intendsThen in its Fall 2021 Supervisory Highlights, the to begin enforcing the 2017 CFPB payday lendingCFPB detailed additional categories of deceptive rule effective June 2022. Further, the Bureaus newacts or practices it identified in the payday lending leadership stated that the Bureau is not satisfied withspace as areas to focus on. First, the CFPB found the status quo in the space, nor is it satisfied with thethat lenders engaged in unfair acts or practices when changes to the payday lending rule made under thethey debited or attempted to debit from consumers Trump administration. As acting-Director Uejio stated,accounts the remaining balance of their loans on the Bureau believes that the harms identified by thethe original due date after the consumers (1) applied 2017 rule still exist, and will use the authority providedfor a loan extension, and (2) received a confirmation by Congress to address these harms, including throughemail stating that only an extension fee would be vigorous market monitoring, supervision, enforcement,charged on the due date. The CFPB determined and, if appropriate, rulemaking. such practices are likely to cause substantial injury Additionally, the CFPBs Summer and Fall 2021including unexpected debits of the full loan balance Supervisory Highlights detailed categories of deceptiveand bank fees. Second, CFPB examiners concluded acts or practices it identified in payday lending thatthat lenders engaged in deception when they either: (1) the agency intends to focus on. First, in the Summerdebited or attempted one or more additional, identical, Supervisory Highlights, the CFPB found that lendersunauthorized debits from consumers bank accounts engaged in deceptive acts or practices in violationafter consumers called to authorize a loan payment by of the CFPA when they sent delinquent borrowersdebit card and lenders systems erroneously indicated collection letters stating an intent to sue if thethe transactions did not process, or (2) debited or attempted one or more duplicate, unauthorized debits 36'