Legal, Regulatory, and Privacy Issues

Robo-comments on payday loans clog regulation-making machinery


A record 1 million comments on a federal payday loan rule will prolong its review, but thousands of pro-payday comments are suspiciously alike

The content on this page is accurate as of the posting date; however, some of our partner offers may have expired. Please review our list of best credit cards, or use our CardMatch™ tool to find cards matched to your needs.

Duplicate robo-comments favor payday loans


A federal rule to rein in payday loan abuses drew about 1 million public comments before the Oct. 7 filing deadline, a record-breaking deluge that will prolong the rule’s review.

The figure includes thousands of pro-payday comments that contain repeated sentences and phrases, calling their authenticity into question.

The filings seem to be submitted by individual borrowers talking about their own experiences. But keyword searches reveal strikingly similar phrases dispersed through the filings.

For example: “I get a simple cash advance because it allows me to pay my power bill on time and avoid any issues down the line,” wrote payday loan user Robert Olson – and Larry Steele, Josh Everert and 210 other commenters. Sometimes they substituted “pay-day loan” for “cash advance.” Other repeat sentences describe borrowers’ use of loans to cover grocery costs, auto repairs and other expenses.

Consumer advocates said the apparent robo-comments reflect an industry drive to counter broad support for the rule, and prolong the review by the U.S. Consumer Financial Protection Bureau. More than 700 community and church groups signed a letter calling for an end to abusive payday lending that was submitted to the CFPB Oct. 6.

“Payday lenders are trying to evade and weaken the rule,” said Gynnie Robnett, director of the payday loan regulation campaign at Americans for Financial Freedom, an alliance of community and consumer groups.

The industry group Community Financial Services Association said in an emailed statement that the pro-payday comments are the expressions of “hundreds of thousands of actual payday loan customers.” The statement did not address the use of duplicate pro-payday language. In a news release Oct. 5, the group said the volume shows how much consumers value payday loans. “The staggering number of comments submitted to the CFPB has stunned even those of us who already know how much customers value access to small-dollar loan products,” said association CEO Dennis Shaul.

Edward D’Alessio, executive director of industry group Financial Service Centers of America, said small-dollar lenders and their industry groups mounted a campaign to let users of the loans be heard. Comments were solicited via online forms and in payday loan stores. He said he was unaware how supposedly individual stories containing scripted phrases got into the official record.

The staggering number of comments submitted to the CFPB has stunned even those of us who already know how much customers value access to small-dollar loan products.

— Dennis Shaul
CEO, Community Financial Services Association

“I know the industry undertook an effort to give voice to consumers who utilized small-dollar loans,” he said.

Proposed rule draws scrutiny

The U.S. Consumer Financial Protection Bureau proposed its rule on small-dollar loans in June, including payday, auto title and some other forms of short-term credit. The centerpiece of the rule is a requirement that lenders review customers’ ability to repay loans. Loans under $500 with limited renewals would be exempt from the requirement. The average payday loan is about $350.

The CFPB says the rule is designed to prevent costly dependence on repeat payday loans, while permitting emergency access to cash. Small-dollar lenders say the rule will make their business unprofitable and force most loan outlets to close. There are about 21,000 payday loan outlets in the 36 states where they are not outlawed.

The CFPB confirmed the number of total comments is about 1 million and said it is “working to process and publish comments as efficiently as possible,” according to an emailed statement. The volume of comments is by far the most ever for the CFPB. Most proposals in the past year drew between 0 and 28 comments. The agency’s second most-commented rule, about arbitration requirements, attracted 51,799 comments.  A recent, controversial rule on prepaid cards drew 6,465 comments. The agency is legally bound to review all comments, and has repeatedly pledged to do so.

By Friday, a week after the Oct. 7 filing deadline, the published file of public comments contained only about 208,000 submissions, far short of the approximately 1 million received. Duplicate and near-duplicate submissions, such as those generated by email forwarding campaigns, can be excluded from the published comments. The CFPB didn’t estimate when its final rule will be completed, which is expected sometime in 2017.

Looking closely at comments

Thousands of the comments published so far seem to be from users of payday loans who oppose the rule because it would hurt their access to credit. But many of these comments contain a mix of phrases used in other pro-payday comments, suggesting they come from a script. The published comments do not include addresses or other identifying information that would enable verification.

An analysis by the group Allied Progress in September found that six identical sentences and two identical paragraphs turned up in hundreds of supposedly individual pro-payday comments. The filings, “although designed to look personal and authentic, include the exact same phrasing, thus calling into question their authenticity,” Allied Progress Executive Director Karl Frisch wrote to the CFPB Sept. 26, two weeks before the filing deadline. “Someone needs to explain how so many individuals could have the exact same experience and come up with the exact same words in the exact same order to describe that experience with just a few unique passages sprinkled in an apparent attempt to throw off suspicious readers,” Frisch said in an accompanying release. The repeated phrases do not turn up in web searches, Frisch added, indicating that individual commenters are not copying them from publicly available material.

Searches of the comment database after the Oct. 7 filing deadline by indicate that thousands of pro-payday comments contain stock phrases. The phrases often appear in slightly altered versions that make the repetition harder to spot. In addition to stories about power bills, the recycled sentences involve people’s struggles to afford groceries, medical bills, pet care and back-to-school shopping, and their desire to avoid overdraft fees and credit card use.

The individual stories often mix recycled comments about policy in with personal anecdotes. “Shutting down payday loan stores would hurt the many families that rely on these loans in order to stay out of bankruptcy,” wrote Theresa Duffy – and Joseph Jenkins, Patricia Bagaza and 150 other commenters who oppose the rule. “It is important to keep this loan option as it is,” they all concluded.

Someone needs to explain how so many individuals could have the exact same experience and come up with the exact same words in the exact same order …

— Karl Frisch
Executive director, Allied Progress

Petition versus narrative

Recycled language is not unique to pro-payday comments. Many supporters of the restrictions on payday lending have filed cut-and-paste comments using language provided by advocacy groups, Robnett said. About 425,000 comments were filed supporting the rule, Robnett said, including pre-written statements submitted through online comment forms.

However those comments, which she compared to signing a petition, are not portrayed as being individual stories based on experience. Nor do they mix supposedly personal anecdotes, told in scripted language, with general statements of support.

Pattern recognition

CFSA, the lending industry group, charged in a news release Sept. 6 that the CFPB was ignoring 12,000 pro-payday comments in a separate comment file. The favorable comments, unearthed through a Freedom of Information Act records request, were submitted to the CFPB’s “Tell Your Story” online portal, the industry group said. These testimonials are unconnected to comments filed about the proposed rule.

Like the pro-payday comments opposing the regulation, the comments obtained by the CFSA also display a pattern of repeated phrases. For example, the sentence “Whenever someone asks for help with utility bills, I tell them to look into getting a short-term loan,” appeared in 20 individual comments. The sentence, “Payday loans made a positive impact in my life,” occurred in over 100 submissions, either verbatim or in variations. The industry group posted the comments online that it obtained through the records request.

CFSA canceled an interview about the apparent robo-comments and has not responded to a request to authenticate them. The emailed statement provided by the group, directed at the analysis by Allied Progress, did not address questions raised by the verbatim repetition of supposedly individual anecdotes.

The industry group operates a site called CFPB Comment Watch, which tracks the backlog of unpublished comments about the payday regulation. The site was launched “to hold the CFPB accountable by shining a light on this backlog and making sure that every comment submitted is counted, uploaded, and considered,” the website says.

Unscripted stories

The regulatory file of comments on the rule also contains pro-payday comments that depart from the script. These unique comments that are free of stock phrases sometimes wind up indicting small-dollar loans rather than supporting them.

“If I need money the friendly people at Advance Financial let me get my money,” said one comment from a borrower who gave his name as Mark Humphrey. “They never ask any questions, they just smile and do it.” The payday industry’s lack of underwriting standards to measure borrowers’ ability to repay is a central reason behind the regulation.

Advance Financial LLC, a Tennessee-based lender mentioned in more than 2,000 filed comments, did not respond to requests for comment.

“I am not sure how I would make it to the next payday without their help,” said Checkmate borrower Milagro Galeas in Oxnard, California. Borrowers who repeatedly use payday loans to tide them over between paychecks can end up paying fees several times greater than the amount they borrow. The average interest rate on payday loans is over 300 percent.

Payday loan users who were asked to comment while they applied for a loan would be unlikely to criticize the industry, Robnett said. “In their most vulnerable moment, they’re approached to sign a comment by a person who has power over their situation,” she said.

Jennifer Robertson, CEO of lender Checkmate, denied that customers felt pressured to comment favorably. The loan and check cashing provider, which has licenses to operate in Arizona, California, Colorado, New Mexico and Washington, was mentioned in 1,700 published comments as of Thursday.

“This was all voluntary,” Robertson said. Checkmate collected 10,000 to 15,000 comments at its storefronts, she said. Some customers who use the company’s check-cashing services commented on how they would lose the service if the payday lending rule is adopted. “We have 55 locations – we would have to close those locations,” Robertson said.

See related: Study: Payday loans trigger overdraft fees

Editorial Disclaimer

The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

What’s up next?

In Legal, Regulatory, and Privacy Issues

Readability battle: card agreements versus Harry Potter

See how card agreements stack up in readability against familiar documents, from novels to nursery rhymes to the U.S. Constitution

See more stories
Credit Card Rate Report
Cash Back

Questions or comments?

Contact us

Editorial corrections policies

Learn more