Reaction to the Consumer Financial Protection Bureau’s (CFPB) final rule regulating short-term, small-dollar loans has been mixed, both in Congress and within the financial industry.
CFPB Director Richard Cordray and many congressional Democrats believe that the rule, which requires payday lenders and similar creditors to determine borrowers’ ability to repay loans before issuing them, will prevent consumers from falling into a cycle of debt created by taking out payday loans to cover financial hardships. Opponents note the detrimental impact the rule could have to certain businesses, and claim it will cause consumers to turn to illegitimate sources for short-term loans.
Find out what points various trade associations and congressional leaders made for and against the new rule.