Payday lenders may soon find friends in Washington

Payday lenders may soon find friends in Washington
"In the wake of sweeping Republican victories in the November 8 elections, efforts by federal regulators to try to reel in predatory lending practices could be curtailed. The CFPB was established in 2011 as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act and has been the target of scorn by lenders and their Republican allies in Congress. Now its efforts are at risk. For example, the CFPB released a proposed rule back in June to try to eliminate predatory debt traps from payday loans and loans backed by borrowers’ car titles. The proposal would require lenders to conduct a “full payment” test to ensure borrowers can manage the loan terms while still covering basic living expenses. The measure is aimed at reducing the propensity of these borrowers to take out numerous consecutive loans over a period of months. But the CFPB is still reviewing the proposal, and it’s likely that any rule would not go into effect until next year, giving Republicans time to dismantle the agency’s efforts."