CFPB payday lender rule could have unintended repercussions, sources say

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By Jennifer Kang
30 Mar 2021

The Consumer Financial Protection Bureau plans to revive the ‘ability to pay’ rule, rescinded in the Trump era, a move which will tighten its grip on payday lenders. While it may be beneficial to have deceptive payday lending practices eliminated, the new rule may stifle the growth of speciality finance lenders and take away a valuable source of funding for borrowers, sources say.

Ever since president Joe Biden took office, the new leadership at the CFPB has not been shy about advertising its aggressive plans to regulate consumer protection violations, ranging from restoring the fair lending unit and policing student loan servicing practices. In recent weeks, acting director David Uejio ...

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