The Revolving Doorman: Dennis Shaul of Community Financial Services Association

Dennis Shaul is the well-paid CEO of the payday lending industry’s special interest trade group, Community Financial Services Association of America (CFSA), which spends millions of dollars lobbying Congress to benefit predatory lenders.

Previously, Shaul worked for the House Financial Services Committee before making a bee line to the revolving door for a job that pays him more than $500,000 a year to shill for an industry he once helped to oversee.

As CEO of CFSA, Shaul regularly misleads the public in media interviews. It is no surprise that he believes the Consumer Financial Protection Bureau has “rushed” reform efforts (after spending years consulting industry and consumer groups on the best approach to payday lending reform.) He also claims the CFPB’s proposed rule will leave consumers scrambling for alternatives that don’t exist even though 81% of borrowers say they would simply cut back if payday loans weren’t an option. He has also claimed the few consumers complain about payday loans even though independent surveys show a majority of borrowers feel taken advantage of by the industry and nearly 75 percent want more regulation.

In addition to his faulty media hype, Shaul also has a habit of citing purportedly independent academic studies to support his pro-payday arguments. In doing so he routinely fails to disclose that the academic studies he cites are paid for by Consumer Credit Research Foundation (CCRF), an organization funded by a payday lender that happens to be a member of the CFSA. Nor does Shaul disclose that the CCRF has been caught editing the academic studies it finances prior to their public release and in some cases successfully impressing upon the study authors to omit information that reflects negatively on the industry.

On some rare occasions the truth does slip out however. During an appearance on WBUR’s On Point with Tom Ashbrook, Shaul admitted that some members of the CFSA have rates that can be “too excessive.”

The Details:

Shaul Is the CEO of Community Financial Services Association of America (CFSA)

• Dennis Shaul Is The CEO of Community Financial Services Association of America. “Dennis Shaul is the chief executive officer for the Community Financial Services Association of America (CFSA). Established in 1999, CFSA is the national organization for small dollar, short-term lending, representing the majority of nonbank storefront lenders across the United States.” [Dennis Shaul Bio, American Banker]

Shaul Previously Worked for the House Financial Services Committee

• Shaul Worked for the House Financial Services Committee. “Shaul became CFSA’s CEO in October 2012, following a total of more than ten years in the U.S. Congress. Most recently, he served as senior advisor to Rep. Barney Frank (D-MA) on the House Financial Services Committee where he worked on the Dodd-Frank Bill and the development of practices regarding anti-money laundering.” [Dennis Shaul Bio, American Banker]

Shaul Was Paid Over Half a Million Dollars in 2014 and 2013 by CFSA

• 2014: $572,208 [CFSA’s 2014 IRS Form 990]
• 2013: $525,547 [CFSA’s 2013 IRS Form 990]
• 2012: $124,336 [CFSA’s 2012 IRS Form 990]

CFSA is the Payday Lending Industry’s Special Interest Trade Group

• CFSA Works to Bend Laws and Regulations to the Will of Payday Lenders. “The Community Financial Services Association of America (CFSA) is the national organization dedicated to advancing financial empowerment for consumers through small dollar, short-term loans. Now in its 14th year, CFSA was established to promote laws and regulations that protect consumers, while preserving their access to credit options, and to support and encourage responsible payday advance industry practices.” [cfsaa.com]

CFSA Receives Millions of Dollars in Funding Each Year from Payday Lenders

• 2014: CFSA Received $7,389,384 In Funding. [2013 IRS Form 990]
• 2013: CFSA Received $6,589,096 In Funding. [2013 IRS Form 990]
• 2012: CFSA Received $6,960,431 In Funding. [2012 IRS Form 990]
• 2011: CFSA Received $6,636,637 In Funding. [2011 IRS Form 990]
• 2010: CFSA Received $6,464,712 In Funding. [2010 IRS Form 990]

CFSA Spends Millions of Dollars Lobbying Congress for Less Regulation of Payday Loans

• 2015: CFSA Spent $597,000 On Federal Lobbying. [Center for Responsive Politics]
• 2014: CFSA Spent $577,000 On Federal Lobbying. [Center for Responsive Politics]
• 2013: CFSA Spent $973,101 On Federal Lobbying. [Center for Responsive Politics]
• 2012: CFSA Spent $2,545,652 On Federal Lobbying. [Center for Responsive Politics]
• 2011: CFSA Spent $2,275,000 On Federal Lobbying. [Center for Responsive Politics]
• 2010: CFSA Spent $2,437,500 On Federal Lobbying. [Center for Responsive Politics]
• 2009: CFSA Spent $2,560,000 On Federal Lobbying. [Center for Responsive Politics]
• 2008: CFSA Spent $1,465,000 On Federal Lobbying. [Center for Responsive Politics]
• 2007: CFSA Spent $1,560,000 On Federal Lobbying. [Center for Responsive Politics]
• 2006: CFSA Spent $1,280,000 On Federal Lobbying. [Center for Responsive Politics]
• 2005: CFSA Spent $1,080,000 On Federal Lobbying. [Center for Responsive Politics]
• 2004: CFSA Spent $780,000 On Federal Lobbying. [Center for Responsive Politics]
• 2003: CFSA Spent $740,000 On Federal Lobbying. [Center for Responsive Politics]
• 2002: CFSA Spent $520,000 On Federal Lobbying. [Center for Responsive Politics]
• 2001: CFSA Spent $320,000 On Federal Lobbying. [Center for Responsive Politics]
• 2000: CFSA Spent $120,000 On Federal Lobbying. [Center for Responsive Politics]
• 1999: CFSA Spent $120,000 On Federal Lobbying. [Center for Responsive Politics]

Shaul Cites Supposedly Independent Academic Studies Without Noting They’re Paid for by a Payday Industry-Financed Group With Shady History

Shaul Cited Study Paid for by Consumer Credit Research Foundation (CCRF) to Argue Restricting Payday Loans Makes Consumers Worse Off… 

• Shaul Cited Academic Study Commissioned by Consumer Credit Research Foundation That Found Reducing Payday Loan Access Leads Consumers to Inferior Substitutes Like Overdrafts and Late Bills. Dennis Shaul, the head of the Community Financial Services Association of America (CFSAA) wrote in an op-ed, “A law in Oregon that capped short-term interest rates “reduced access to payday loans in Oregon, and … former payday borrowers responded by shifting into incomplete and plausibly inferior substitutes,” one study found. “Most substitution seems to occur through checking account overdrafts of various types and/or late bills,” with fees greater than that of payday loans. States that have banned payday lending outright, such as CRL’s home state of North Carolina, have seen similar results.” The academic study he cited was paid for by Consumer Credit Research Foundation. [Dennis Shaul Op-Ed, The Hill, 2/3/16, Jonathan Zinman, “Restricting Consumer Credit Access: Household Survey Evidence On Effects Around The Oregon Rate Cap”, 12/2008]

…But CCRF Is a Payday Lender Funded Organization That Has a History of Editing the So-Called “Academic Research” it Commissions

• Funded by Payday Lenders, the CCRF Was Found to Have Edited and Revised an Academic Paper They Funded to Make It More Supportive of the Payday Lending Industry. “The payday loan industry was involved in almost every aspect of a pro-industry academic study, according to emails and other documents reviewed by The Huffington Post. The revelation calls into question a host of other pro-industry academic studies that were paid for by the same organization. While the researchers disclosed their funding source for the 2011 paper “Do Payday Loans Trap Consumers in a Cycle of Debt?” they also assured readers that the industry “exercised no control over the research or the editorial content of this paper.” The assertion was patently false, according to correspondence obtained from Arkansas Tech University through an open records request by the watchdog group Campaign for Accountability. The group subsequently shared the documents with HuffPost. The Campaign for Accountability has filed requests for documents from professors at three other universities — the University of California, Davis; George Mason University; and Kennesaw State University — who produced similar pro-industry studies. So far, it has been met with resistance. Only Arkansas Tech turned over a cache of its records. The emails show that the payday loan industry gave economics professor Marc Fusaro at least $39,912 to write his paper, and paid an undisclosed sum to his research partner, Patricia Cirillo. In return, the industry received early drafts of the paper, provided line-by-line revisions, suggested deleting a section that reflected poorly on payday lenders, and even removed a disclosure detailing the role payday lending played in the preparation of the paper. Hilary Miller, the president of the Payday Loan Bar Association, a lawyers’ group for the industry, worked closely with the researchers on their study. Miller has represented payday lending giant Dollar Financial, and is also the president of the pro-industry group the Consumer Credit Research Foundation.”[Huffington Post: “Emails Show Pro-Payday Loan Study Was Edited By The Payday Loan Industry”, 11/2/15]

Shaul Says the Sky’s Falling and CFPB Is to Blame, Not His Loans

Shaul Claims Proposed CFPB Regulations Would Force Closure of 60% of Payday Storefronts…

• Shaul Told American Banker the CFPB’s Proposed Rule Would Shutter 60% or More of Storefront Payday Lenders. “If the CFPB sticks to an outline of its proposal released a year ago, as many as 60% or more of storefront payday lenders could shut down, said Dennis Shaul, chief executive of the Washington-based Community Financial Services Association of America, a leading trade association for short-term lenders. If that happened, consumers would have nowhere to go for emergency funding, he said. Many would likely resort to unregulated online lenders. “We’re concerned that small operators would be driven out of business and small operators are where the most entrepreneurial, novel ideas come from, and where intelligent cost-cutting comes from,” Shaul said.” [American Banker: “CFPB Faces No Win Scenario Payday Lending,” 3/21/16]

…But the CFPB’s Proposed Rule Is Aimed at Ensuring a Borrower’s Ability to Repay Their Loan; It’s Not a Ban on Payday Lending

• The CFPB’s Proposed Rule Would End Debt Traps by Requiring Lenders to Take Steps to Ensure Customers Can Repay Their Loans. “The CFPB wrote in a blog post, “Today the Consumer Financial Protection Bureau (CFPB) announced it is considering proposing rules that would end payday debt traps by requiring lenders to take steps to make sure consumers can repay their loans. The proposals under consideration would also restrict lenders from attempting to collect payment from consumers’ bank accounts in ways that tend to rack up excessive fees. The strong consumer protections being considered would apply to payday loans, vehicle title loans, deposit advance products, and certain high-cost installment loans and open-end loans. “Today we are taking an important step toward ending the debt traps that plague millions of consumers across the country,” said CFPB Director Richard Cordray. “Too many short-term and longer-term loans are made based on a lender’s ability to collect and not on a borrower’s ability to repay. The proposals we are considering would require lenders to take steps to make sure consumers can pay back their loans. These common sense protections are aimed at ensuring that consumers have access to credit that helps, not harms them.” [ConsumerFinance.gov, 3/26/15]

• Yahoo Finance: “The CFPB’s Rules Wouldn’t Eliminate Payday Loans—They Would Just Make Them Less Harmful.” “In truth, the CFPB’s rules wouldn’t eliminate payday loans — they would just make them less harmful.” [Yahoo Finance, 3/26/15]

Shaul Claims The CFPB’s Push to Reform Payday Lending Has Been “Rushed” Even Though CFPB Outlined Its Plan More Than a Year Ago

• Shaul Thinks CPFB Shouldn’t Rush Through New Payday Lending Rule. In and American Banker op-ed, Dennis Shaul, the head of payday lending trade group Community Financial Services Association of America (CFSA) wrote, “The truth is the CFPB has quickly moved to a regulatory solution that creates more problems than it solves…Rees’ insistence that the rule should be published now overlooks the fact that a rushed issuance of the rule would short-circuit the much-needed debate about the rule’s consequences. Rees’ insistence that the rule should be published now overlooks the fact that a rushed issuance of the rule would short-circuit the much-needed debate about the rule’s consequences. Those consequences include the loss of tens of thousands of jobs and the confusion and frustration that will be felt by consumers who need these products. The CFSA has long advocated for a thoughtful and deliberate approach to the bureau’s rulemaking. We do not seek to forestall regulation but to make sure it is done correctly. The CFPB should take the time necessary to fully consider the real-life consequences of its rulemaking.” [American Banker: Dennis Shaul Op-Ed: “CFPB’s Payday Rule Poses Real Danger to Lenders,” 4/14/16]

• Even Though The CFPB Proposed an Outline of the New Payday Lending Rule Over a Year Ago. March 26, 2015: The CFPB Outlined Proposed Rule for The Payday Lending Industry. “Today, the Bureau is publishing an outline of the proposals under consideration in preparation for convening a Small Business Review Panel to gather feedback from small lenders, which is the next step in the rulemaking process. The proposals under consideration cover both short-term and longer-term credit products that are often marketed heavily to financially vulnerable consumers. The CFPB recognizes consumers’ need for affordable credit but is concerned that the practices often associated with these products – such as failure to underwrite for affordable payments, repeatedly rolling over or refinancing loans, holding a security interest in a vehicle as collateral, accessing the consumer’s account for repayment, and performing costly withdrawal attempts – can trap consumers in debt. These debt traps also can leave consumers vulnerable to deposit account fees and closures, vehicle repossession, and other financial difficulties. [CFPB Blog Post, 3/26/15]

Shaul Claims Regulating Payday Loans Will Leave Consumers Without Alternatives Even Though Borrowers Say They Would Just Cut Back

• Shaul Claims CFPB Rule Will Leave People Scrambling for Alternatives That Don’t Exist. Dennis Shaul, the head of payday lending trade group CFSA wrote, “The changes imposed by the looming CFPB proposal would force many operators to shut down, leaving consumers scrambling for other forms of credit that are not readily available. For those left searching for alternatives, Rees provides a very limited solution that would only benefit the least risky of borrowers. Such selectivity would not begin to serve the needs of the 19 million households that currently use short-term credit.” [American Banker: Dennis Shaul Op-Ed: “CFPB’s Payday Rule Poses Real Danger to Lenders,” 4/14/16]

• Even Though 81% Of Payday Borrowers Said They Would Simply Cut Back If Payday Loans Weren’t an Option Pew Study. 81% Of Payday Borrowers Say They Would Cut Back On Expenses If Payday Loans Were Unavailable. “Even though most borrowers use payday loans for recurring expenses, rather than for emergencies, survey respondents indicated they would use a variety of options to deal with those needs if payday loans were no longer available. In general, borrowers are more likely to choose options—such as adjusting their budgets, delaying bills, selling or pawning personal items, or borrowing from family or friends—that do not connect them to a formal institution. Eighty-one percent of payday borrowers say they would cut back on expenses if payday loans were unavailable.” [Pew Charitable Trusts, 7/12]

Payday Industry Trade Group Leader Throws Members Under the Bus, Admits Rates Can Be “Too Excessive”

• Payday Trade Group Leader Admits His Members’ Rates Can Be “Too Excessive.” During an appearance on the May 17 broadcast of WBUR’s On Point with Tom Ashbrook, Dennis Shaul – the CEO of Community Financial Services Association of America, the payday lending industry’s trade group – said: “I grant you that there are cases even among our lenders, who I think represent the cream of the crop, where the rate is too excessive.” [WBUR On Point With Tom Ashbrook, 5/17/16]