From: WSJ | Total Return
By Alan Zibel
In the aftermath of the financial crisis, U.S. regulators imposed new requirements on credit-card companies and mortgage lenders, mandating that they evaluate whether borrowers have the financial resources to pay back their loans. Now, the focus is on high-cost, short-term “payday” loans.
The principle—that lenders should avoid making loans to borrowers who can’t afford them—may sound simple. But translating such a concept into rules lenders can follow is much more difficult in practice, particularly for low-income borrowers who take out payday loans. The Consumer Financial Protection Bureau is facing such a task as it works on the first set of national rules for the $46 billion payday-lending industry.