Payday lenders to face new regulations
WASHINGTON (AP) — Payday lenders are facing new federal regulations aimed at preventing low-income borrowers from being buried by high fees and rising debt loads.
The Consumer Financial Protection Bureau will unveil a set of proposed rules on Thursday. President Barack Obama is also expected to use an afternoon speech in Birmingham, Alabama, to address the plans to oversee the payday sector and efforts by congressional Republicans to limit the bureau's authority.
Borrowers barely getting by on low paychecks have increasingly relied on storefront and online lenders, prompting the federal government to set standards for a multibillion dollar industry that has historically been regulated at the state level.
The loans' steadily compounded fees have overwhelmed some borrowers, causing them to lose their bank accounts and their cars — and even risk prison time.