The Consumer Financial Protection Bureau (CFPB) released a recent report that highlights the upcoming regulations that the bureau intends to impose on payday loans. These new regulations are expected to limit lenders’ access to consumers’ bank accounts, a practice that results in overdraft fees and the closings of accounts. The agency’s coming rule is the first effort by the federal government to rein in small-dollar short-term loans, for which interest rates can climb to as much as 500%
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CFPB Sheds Light on Coming Payday-Loans Rule
“The true costs of these loans, taken in the aggregate, must be kept in mind as we assess the effects on consumers,” CFPB Director Richard Cordray told reporters on a conference call Tuesday. “Getting booted from the banking system can have far-reaching repercussions for consumers, leading to a downward spiral that costs them even more money and their precious time.”
