The Consumer Financial Protection Bureau (CFPB) is currently developing regulations that could protect millions of lower-income Americans from predatory payday lenders. Payday loans — small, short-term, high-interest loans often secured by a personal check post-dated to the borrower’s next payday — frequently lead to snowballing debt cycles and financial hardships for borrowers. Working with students in our Regulatory Policy Clinic, we submitted public comments to the CFPB. We encourage the CFPB to require better information disclosures for loans; consider the costs and benefits of regulation for society at large rather than just consumers and lenders; and consider how proposals might push consumers to meet their credit needs through avenues such as pawn lending and overdraft services.
The full comments are available here.