The rules created under that law made it illegal for lenders to charge more than 36 percent for payday loans, vehicle title loans, installment loans and other forms of credit. The goals for the final rules should be to keep payments affordable and give borrowers enough time to pay their loans. The bureau discredited that claim two years ago in a striking study of more than 12 million loans issued in more than two dozen states. The proposal would require lenders to determine whether borrowers can repay their loans, but the requirement is dangerously vague and will need to be specified to be effective. The Pew Charitable Trusts’ small-dollar loans project is especially critical of the proposal.

Source: New York Times June 03, 2016 00:33 UTC