The Consumer Financial Protection Bureau releases new rules today governing "payday" lending - high interest loans that affect low-income communities. New regulations assess a borrower's ability to repay loans and meet basic living expenses. Payday lenders are now prevented from directly withdrawing funds from a borrower's bank account under certain circumstances.
Eric LeCompte, our executive director releases the following statement:
"These new payday rules mark an important step forward for responsible lending and borrowing.
"Nobody should take out high-interest loans that can make a bad economic situation even worse.
"Some borrowers lose their bank accounts because of overdrafts when payday lenders directly extract funds. Access to a bank account is important for individuals struggling financially.
"Some payday lending is actually predatory lending. Predatory practices must be discouraged.
"These rules are a good first step. We also need strong state laws and we need Congress to support these rules."
Read more about payday lending