New Research From nonPrime101 Critiques the CFPB's Data Studies

    CLEARWATER, FL, February 12, 2016 /24-7PressRelease/ -- nonPrime101's newest report, "Searching for Harm in Storefront Payday Lending," will be published Tuesday, February 16 on the nonPrime101 website.

The report is based on a unique five-year data set of over 100 million payday loans representing 20 percent of the storefront payday market. Because of the unique size and duration of the data set, nonPrime101 set out to replicate statistical analyses used by the Consumer Financial Protection Bureau (CFPB) to build its case to radically regulate the storefront payday sector.

"This report finds that the CFPB's one-year snapshot is too short to discern the extent of 'harms' caused by the product and roughly 40 percent of storefront consumers are not likely to meet the CFPB's cost-based definition of 'harm.' Independent data suggests many who do incur that cost-based 'harm' still benefit from the loan," remarks Rick Hackett, former Assistant Director at the CFPB and current Partner at Hudson Cook. Hackett is now part of nonPrime101's Small-Dollar Markets research team, who conducted the research and wrote the report on "Searching for Harm in Storefront Payday Lending."

nonPrime101 found that the data results closely replicate reported CFPB findings such as the number of loan sequences per borrower in a 12-month period. However, when the same questions were applied to a more complete history of borrower behavior, over the entire market life cycle of borrower use, significant differences in outcomes and in the effect of biases of the CFPB testing methods were found.

"With more than half of consumers likely benefitting from the product, regulators' plan to ban it goes too far, and this report suggests a more tailored intervention that would curtail extreme usage but retain credit access," Hackett concludes.

The report is slated for publishing at 11 a.m. on Tuesday, February 16, and will be available on nonPrime101.com.

About nonPrime101.com
nonPrime101.com provides research studies and articles about non-prime consumer behavior to help the public and researchers better understand them. The rate of non-prime consumers, which include thin-file, no-file, and prior prime consumers, continues to rapidly grow and nonPrime101.com provides unbiased and empirical studies that show the credit usage behaviors, activities, and needs of subprime consumers as a whole. For more information, visit nonprime101.com.

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