Federal Agency Proposes Rules to Crack Down on Payday Loans

at 9:00 AM
 (Photo: Dan Kitwood/Getty Images)

The Consumer Financial Protection Bureau proposed new regulations Thursday to protect consumers from payday, auto title and other high-cost loans. The so-called "debt trap" loans can carry annual interest rates of over 300 percent, in addition to other fees and penalties. The new rules would require lenders to verify a borrower's ability to repay and prohibit repeated short-term borrowing. Critics say the rules would hurt consumers who need payday loans to manage budget shortfalls. We discuss the rules and their potential impact on California consumers.

A Video from the Consumer Financial Protection Bureau

More Coverage

Guests:

Nick Bourke, director, Small-Dollar Loans Project, Pew Charitable Trust

Liana Molina, director of community engagement, California Reinvestment Coalition

Gary Rivlin, journalist; author of "Broke, USA: From Pawnshops to Poverty, Inc. How the Working Poor Became Big Business"

Dennis Shaul, chief executive officer, Community Financial Services Association of America

Sponsored