On June 2, 2016, the Consumer Financial Protection Bureau
("CFPB") released a statement regarding proposed new rules aimed
at the payday lending industry. The proposed rules seek to
protect consumers from what the CFPB refers to as "payday debt
traps" and may impose stricter requirements on such payday
lenders. The CFPB is soliciting comments on the proposed
payday lending rules, which must be received by the CFPB no later
than September 14, 2016.
What are the Proposed New Payday Lending Rules?
CFPB Proposes New Payday Lending Rules
The CFPB has proposed a "full-payment test."
Under the test, lenders would be required to make an up-front
determination as to a consumer's ability to repay a loan prior
to providing that loan. Before offering such loans, payday
lenders would be required to verify that consumers can afford to
pay the full amount of each payment owed when due, whether as a
lump sum or on an installment plan basis. Among other things,
payday
