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CFPB proposed “Ability-to-Repay” Rules in Short-term Lending – The Need for Income and Employment Verification

During a recent Equifax webinar discussing the Consumer Financial Protection Bureau’s (CFPB) proposed rules in short-term lending; the majority of the participants indicated that they currently require income information as part of the loan origination process (poll 1), yet two thirds of the participants indicated that they were relying on borrower-furnished income and employment information.


While most lenders see the importance of verifying income and employment information, many fail to leverage 3rd party verified data. Overstating income affects performance and about four out of five applicants overstating income make less than $50k. Differences in stated vs. verified income negatively affect loan performance by an average of – 5 percentage point for overall applicants.*

The webinar attendees had the opportunity to hear from guest speaker Keith Barnett, a Partner at the law firm of Sutherland Asbill & Brennan LLP, and learn more about the “ability-to-repay” requirements that the CFPB is contemplating imposing on short-term and certain longer-term loan products. The attendees also learned that lower-income consumers, those most likely to face ability-to-repay issues, were much more likely to overstate their incomes on their loan applications. The CFPB’s emphasis on establishing consumers’ ability to repay makes 3rd-party income and employment verifications more crucial than ever. You can learn more about the research on stated income and loan performance, as well as gain additional insight into the CFPB’s proposed regulations by accessing the complete webinar recording and presentation slides online or contacting an Equifax representative today at

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