Consumer Bureau scraps restrictions on payday loans

Source: Stacy Cowley, New York Times (Paid Registration)

The Consumer Financial Protection Bureau on Tuesday formally rescinded a plan to impose new limits on payday lending, handing the industry a major victory by killing off tighter rules that it spent years lobbying to overturn.

The proposed rules would have been the first significant federal regulations on an industry that makes $30 billion a year in high-interest, short-term loans, often to already struggling borrowers. Those loans can leave borrowers trapped in cycles of debt, incurring fees every few weeks to replenish loans they cannot afford to pay off.

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