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