Now there’s a real chance to end this payday debt trap. The Consumer Financial Protection Bureau – the agency conceived by Sen. Elizabeth Warren and created in response to the financial and economic meltdown of 2008 – is preparing to regulate abusive payday, car-title and installment lending, and it has put out a promising first look at the rules it has in mind.
Now that we have seen a rough outline of the Bureau’s thinking, the real battle begins. The initial proposal, while strong in some ways, includes worrisome gaps that could allow triple-digit-interest lenders to skip the essential process of verifying a borrower’s ability to repay. We need the CFPB to close this loophole before it puts out a final rule.
Together we have won and defended a CFPB willing to take on tough jobs like this one. Together we can keep pushing, and end the payday and car-title debt trap once and for all.