Payday Lending Faces Tough New Restrictions by Consumer Agency

www.nytimes.com

The rules announced by the agency, the Consumer Financial Protection Bureau, are likely to sharply curtail the use of payday loans, which critics say prey on the vulnerable through their huge fees. Under the new rules, lenders would be allowed to make a single loan of up to $500 with few restrictions, but only to borrowers with no other outstanding payday loans. For larger or more frequent loans, lenders would have to follow a complex set of underwriting rules meant to ensure that customers had the means to repay what they borrowed.

Huge blow against the payday lending space, although unclear how much power the CFPB has with the current administration.

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