Federal regulators issued rules that are new Thursday that may drastically rein in access to pay day loans and limit specific practices which have drawn ire from customer advocates.
Pay day loans, which offer strapped consumers with immediate access to money, are generally seen as a their ultra-high interest levels and repayment that is short. Borrowers usually can not manage to spend them right back therefore become taking right out loans that are new getting stuck in a cycle of financial obligation.
The Consumer Financial Protection Bureau will require payday lenders to determine a borrower’s ability to repay the loan while still meeting basic living expenses and major financial obligations under the new rules.