CFPB Relaxes Rules on Payday Lenders

Yesterday, the CFPB formally rescinded a plan to impose new limits on payday lending; the proposed changes were a signature effort of the CFPB from the Obama administration and would have limited the number of loans a borrower could obtain and more importantly would have required lenders to verify that the borrowers had the capacity to repay the loan; the payday lending industry lobbied hard against these proposals and have ultimately been successful; Kathleen Kraninger, CFPB director, defended the decision by saying the proposals were based on insufficient evidence to justify the harm it would have caused lenders; some minor provisions were left in place such as preventing lenders from trying to repeatedly take funds from a borrower’s overdrawn bank account. The New York Times.