U.S. consumer watchdog delays existing payday lending rule compliance
June 7, 2019 / Source: Reuters
U.S. consumer watchdog delays existing payday lending rule compliance
WASHINGTON, June 7 (Reuters) – The U.S. Consumer Financial Protection Bureau on Friday said it is once again extending the compliance date for an ability-to-repay provision of a rule cracking down on payday lenders.
Payday firms will now have until Nov. 19, 2020 to begin ensuring borrowers have the means to repay a loan, as well as meet other living expenses, when the loan comes due, typically within 30 days.
Payday loans are small and short-term, typically due with a borrower’s next paycheck and often bearing a high interest rate.
The move to extend the compliance date comes after the agency’s chief, Kathy Kraninger, issued a proposal in February to seek fresh recommendations on how to implement it.
The CFPB was created in the wake of the 2007-09 global financial crisis to crack down on predatory lenders. While lenders argue that its payday rules would effectively eliminate critical stop-gap funding to borrowers, consumer advocates have long criticized the lenders for saddling borrowers with annualized interest rates that often reach several hundred percent. (Reporting by Katanga Johnson; Editing by Dan Grebler)