The Consumer Financial Protection Bureau (CFPB) released a new rule focusing on alleged “debt traps” caused by payday loans.
It is hard to know exactly what is in this 1,590-page rule, but it includes a “Full Payment Test” requiring lenders to “determine whether the borrower can pay the loan payments and still meet basic living expenses and major financial obligations both during the loan and for 30 days after.”
Will consumers who need a loan to cover basic living expenses until their financial condition improves now be denied a hand up? If so, this rule is disastrous for the very people it allegedly protects.
Read more at Mercatus.org