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Critics blast CFPB’s plan to weaken payday lender rules

Joe Mont | February 8, 2019

As would be expected, critics are lining up to take their shots against the Consumer Financial Protection Bureau for attempting to scale back its rules for payday lenders.

On Feb. 6, the agency proposed rescinding sections of a 2017 rule targeting small-dollar lending, including payday and vehicle title loans.

In October 2017, facing down Republican opposition and industry petitions and protests, the CFPB—under the leadership of former director Richard Cordray—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.”

The consumer protections promulgated in 2017 covered 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.

Under the CFPB’s rule, lenders must conduct a “full-payment test” to determine upfront that borrowers can...

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