Payday Loans, Auto Title Loans Face Tough New Crackdown
Payday loans will be severely restricted under new rules being proposed today by federal regulators.
Primarily, the rules will require lenders to make sure consumers can afford to repay the loans and will require lenders to report loans to a credit-bureau-like entity to track how many loans are outstanding and how much is owed.
The rules proposed by the Consumer Financial Protection Bureau will not ban all payday loans, auto title loans or other high-cost loans. But they serve as the federal government’s first big swing at lenders that sometimes charge consumers nearly 400 percent interest and bury them in a bottomless hole of debt.
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