A rule drawn up by the CFPB under then President Barack Obama requires Payday lenders to determine that borrowers could afford to repay their loans.
Under republican appointed leadership, the bureau has proposed rescinding the rule. The new director, Kathy Kraninger, recently confirmed, is taking a whack at this protection rule as one of her first
The reason for the rule lies in part due to a pattern in the industry whereby people take up to 10 successive payday loans which lead to insane costs for the borrowers according to a CFPB study.
Director Kraninger is scheduled to appear before the House and is sure to face concerned members especially Democrats.
We’ll see if the rule is indeed rescinded or if there is enough push back to keep it in the books.
