Financial watchdog proposes rollback of payday lending rules
NEW YORK (AP) – The nation’s federal financial watchdog has announced its plans to roll back most of its consumer protections governing the payday lending industry.
It’s the Consumer Financial Protection Bureau’s first rollback of regulations under its new Director, Kathy Kraninger, who took over the bureau late last year.
The cornerstone of the regulations focused on making sure borrowers could afford to repay a payday loan without being stuck in a cycle of debt. The industry was against the new regulations, arguing they were too complex and could kill business. This standard would be repealed under the new rules.
The CFPB proposed keeping in place consumer protections that would ban the industry from making multiple debits on a borrowers’ bank accounts, which consumer advocates argued caused borrowers hardship through overdraft fees.