The new director of the Consumer Financial Protection Bureau, Rohit Chopra, has started rattling his interventionist saber only two months after his Senate confirmation. From pushing the Federal Deposit Insurance Corp. to block bank mergers to attacking bank overdraft fees, Mr. Chopra is moving aggressively. If the CFPB’s inquiries into “Buy Now Pay Later” credit and pawn loans are a leading indicator, it seems only a matter of time before Mr. Chopra revisits the perpetual progressive irritant—payday loans.

 

A study we recently completed questions the wisdom and legality of the CFPB’s last attempt to regulate payday loans, a rule from 2017. This rule provides the template for efforts to regulate payday loans out of existence. That massive rule limited payday-loan customers to no more than six loans a year unless they could meet a rigid government-mandated ability-to-repay standard.

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