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Payday-Lending Rules Near as U.S. Agency Sees Debt Traps

March 25 (Bloomberg) -- The U.S. Consumer Financial Protection Bureau is in the “late stages” of writing rules on short-term lending after finding the business draws consumers into loans they can’t afford, according to its director. * “The business model of the payday industry depends on

people becoming stuck in these loans for the long term,

since almost half their business comes from people who are

basically paying high-cost rent on the amount of their

original loan,” CFPB Director Richard Cordray said in

remarks prepared for a field hearing in Nashville today * Cordray said the bureau is now formulating “new rules to

bring needed reforms to this market,” without specifying

the agency’s plans * Restrictions on payday lending may affect firms including

Advance America Cash Advance Centers, a unit of Grupo

Elektra; Cash America International; EZ Corp.; Community

Choice Financial and Ace Cash Express

For Related News and Information: Cash America to Pay $19 Million Over Federal Consumer Claims (1) NSN MWKZGR6K50XU <GO> Online Lenders Calling for Clarity on Warning About Payday Firms NSN MRU9WT6KLVSC <GO> U.S. Regulators Squeeze Banks to Cut Ties to Some Online Lenders NSN MR8HLN6JIJUP <GO>

To contact the reporter on this story: Carter Dougherty in Washington at +1-202-624-1907 or cdougherty6@bloomberg.net To contact the editors responsible for this story: Maura Reynolds at +1-202-654-7360 or mreynolds34@bloomberg.net Anthony Gnoffo

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