Lefties like Elizabeth Warren were tone deaf to the needs of low income people, and they came out with misguided efforts, such as the CFPB's restrictions on payday lending which made it harder for anyone wanting a payday to get one. However, the Trump administration aims to make it easier.
A payday loan might have a high interest rate that the upper class folks like Warren would never want for themselves. So they think of it as "predatory lending" and want to slap strict rules on them.
J.D. Vances' book "Hillbilly Elegy" was an excellent glimpse into the lives of poor folks. And one part of the book explained how the author used such loans to get through the month when he was working for very little money. It turns out that paying the interest on the loans was cheaper than paying late payment fees for ordinary monthly bills. There was a rational, economic, non-predatory, use for the loans.
Now we hear that the payday loan rules are about to be relaxed. See CFPB watchdog looks to rescind crucial part of payday loan rules:
The CFPB finalized rules last year that would, among other changes, force payday lenders to take into account the ability of their customers to repay their loans in a timely manner, in an effort to stop a harmful industry practice where borrowers renew their loans multiple times, getting stuck in a cycle of debt. Those “ability to repay” regulations will now be revisited in January 2019, the bureau said. ...
The cornerstone of the rules enacted last year would have required that lenders determine, before approving a loan, whether a borrower can afford to repay it in full with interest within 30 days. The rules would have also capped the number of loans a person could take out in a certain period of time. ...
The CFPB’s ability-to-repay rules are complex, spanning hundreds of pages, and govern only short-term loans that many payday lenders rely on. The payday lending industry was adamant in their opposition, and even made an unsuccessful push for the Republican-controlled Congress to use their authority under the Congressional Review Act to veto the rules.
The industry argues that the CFPB’s rules are too complex and would lead to the closing of hundreds of payday lending stores and a substantial decline in lending volumes.
Proponents of the rule should read J.D. Vance's book.
Update: Related link: New Documents Reveal How Obama Unjustly Targeted Payday Lenders.
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2:01 PM 10/29/2018
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