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CFPB finalizes its polarizing payday lending rule

Joe Mont | October 5, 2017

Facing down Republican opposition and industry petitions and protests, the Consumer Financial Protection Bureau has finalized a long-gestating rule “aimed at stopping payday debt traps by requiring lenders to determine upfront whether people can afford to repay their loans.”

“These strong, common-sense protections cover loans that require consumers to repay all or most of the debt at once, including payday loans, auto title loans, deposit advance products, and longer-term loans with balloon payments,” a Bureau statement says. “The rule also curtails lenders’ repeated attempts to debit payments from a borrower’s bank account, a practice that racks up fees and can lead to account closure.”

Payday loans are typically for small-dollar amounts and due in full by the borrower’s next paycheck, usually two or four weeks. They can be expensive, with annual percentage rates... To get the full story, subscribe now.