The Consumer Financial Protection Bureau (CFPB) has announced its long-awaited rule on short-term small-dollar lending. If history is any guide, payday lending will be severely curtailed and those who rely on it will be made worse off. People who already have too few credit options will soon have even fewer.
Millions of Americans use short-term credit to tide them over to the next paycheck, whether it's to pay a utility bill or an unexpected expense. When they use payday loans, they almost invariably report a positive experience, as two recent surveys have shown.
So if customers report both a need for the product and high approval ratings, why is a federal agency about to impose onerous new regulations? Simply put, the CFPB hasn't engaged consumers. Instead, the bureau's actions have been guided by an activist-driven propaganda campaign against the industry.
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