It's the beginning of June 2013 and that noise you hear is indignant hand-slapping and foot-stomping regarding payday loans and the short term loan industry.  A new voice has added to the noise.  Raj Date, the former Deputy Director of the Consumer Financial Protection Bureau (CFPB) has come out publically in favor of additional short-term lending products.

Specifically he advocated that banks adopt a short term program that better serves the underbanked.

Date sees what he calls "the small-dollar credit problem" as one that can be largely solved by better data, which can then give lenders an incentive to lower their prices. Banks, with their sophisticated and established operating systems, have the means to offer cheaper short-term loans and still make a profit — but they have to be willing to significantly rethink the prices they charge, he says.

"The credit costs are much higher than what they need to be. I think that through the application of more and different data sources, you can actually make fraud and credit decisions much better than has been possible in the past, and that, with the right competitive dynamic, can therefore start bringing pricing in," he says.

As a former officer of the CFPB his voice is uniquely qualified to rise above the rest and center attention on an area that at the moment, suffers from noise overload.  There aren't too many people saying that these products are needed, but we just need to develop better ones.  A moderate voice that understands the industry would be of great service to all.

But, the noise is likely to continue until short term loans stop becoming a political football.

Thank you AmericanBanker.com for the source material.