The Consumer Financial Protection Bureau (CFPB) has released a plan for to regulate predatory payday loan services.
According to Law360 (subscription required), the new plan will apply to both banks and nonbank lenders, and will regulate short-term lenders by making sure incentives that they offer to their employees do not forsake the best interest of customers. They will also examine if the payday lender represents the number of credit consumers will receive and whether they fully disclose to consumers the extent to which their personal information will be shared with third parties.
“Many consumers turn to payday loans because they find themselves in a financial pinch. However, these small-dollar loans can come at a hefty price, sometimes with an APR of more than 400 percent,” the CFPB said in the plan.
Richard Cordray, the newly appointed director of the CFPB, added that "holding both banks and nonbanks accountable to consumer financial laws will help create a fairer, more transparent market for consumers. It will create a better environment for the honest businesses that serve them. And it will help the overall economic stability of our country.”
If you have been wronged by consumer fraud, contact Sokolove Law to find out if a consumer fraud lawyer may be able to help you and represent your case.