Better Markets-
To protect Main Street Americans — consumers, investors, homeowners, students, soldiers, retirees and the elderly — from predatory financial behavior and financial instability that can lead to devastating financial crashes like 2008, the Dodd Frank law created the Consumer Financial Protection Bureau (CFPB). It was designed to be and has been a powerful, independent and effective consumer cop policing the Wall Street beat.
However, in Director Kathy Kraninger’s first major rulemaking, the CFPB is proposing two indefensible changes to the payday lending rule:
1) Eliminating the “ability to repay” underwriting requirements for extending a payday loan, essentially greenlighting lending to people who do not ability to repay a loan.
2) Eliminating the “reborrowing limits” by any single borrower, allowing the payday lender to keep lending to the borrower who cannot repay so that they can repay the original loan that they can’t repay.