In contrast, fringe lenders often collect and share customer data and sell defaulting loans to other private buyers—transactions that are often kept secret. Once you have entered into a contract for a loan with one of these lenders, the right to collect on that loan can be sold to any third party. The post office’s collection process, on the other hand, would have to be made public and submitted to agency and legislative review, which would offer more transparency than any other current lending and collecting mechanisms. The individuals involved would maintain the same, if not higher, privacy protections granted to all other customers of regulated banks.Source: How the Other Half Banks
This explains the extremely low standards in the fringe lending area.