Federal consumer watchdog takes aim at payday lenders with proposed rules

From: Washington Post

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The proposal from the Consumer Financial Protection Bureau marks the first attempt by the federal government to regulate shorter-term loans, which also include auto title and installment lending.

The rules still face months of review — and potential court challenges — but if they take hold they could dramatically transform and shrink an industry that provides cash to borrowers in a pinch. Some lenders say that under the new rules fewer loans will get made; they’ll have no choice but to close up shop. Yet consumer advocates see this as an opportunity for borrowers to turn to safer options — without having to pay triple-digit annualized interest rates.

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