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CFPB To Issue New Rules For Payday Lenders

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According to this article in the New York Times, the Consumer Financial Bureau is set to release its first set of rules for payday lenders. Full details of the proposed rules have not yet been released, but it appears that the Bureau will be directing some of the rules at a fuller disclosure of interest rates and fees associated with payday loans.

While the CFPB can't put a cap on the exorbitant interest rates that payday lenders charge, it can declare some of their practices unfair, deceptive, or abusive. Whether there will be a right for private enforcement remains unclear, but is also unlikely.

According to the NYT and David Silberman of the CFPB, the agency's reasearch has revealed that what is supposed to be a short-term loan can turn into a "long-term and expensive debt trap."

As soon as the new rules are released for comment, we will update the blog to discuss them.