Delay in US Payday Loan Reform will Affect Consumers Significantly

A decision to delay implementing important rules regarding the regulations of various types of installment loans for 15 months was taken by the US Consumer Financial Protection Bureau (CFPB) last week. This is going to affect the borrowers who opt for payday loans, vehicle loans, etc. The finalization of the rule was done in November 2017 after discussing with different stakeholders to protect vulnerable consumers from such short term loans. But after Kathy Kraninger’s appointment as the new director of the CFPB in Feb 2019, a major change to delay the reforms in payday rule was seen.

Kathy Kraninger also proposed changes to revoke key borrower protections such as the requirement for lenders to ensure the ability of borrowers to repay the loans. Due to the growing demand for installment loans, many online sources such as Slick Cash Loan are effectively serving the needs of borrowers to meet emergency expenses.

Most of the people have got benefitted due to the availability of installment loans. But some people who fail to manage to repay the loan amount end up falling in the debt trap. Various consumer, civil and human rights, community and labor organizations have come forward to oppose the delay of CFPB to implement rule regarding consumer protections. Various researches and studies have been presented to show the impact of high-interest loans on American people.

In addition to this, the appeal is made to CFPB to require companies to follow the payday rule by August 2019 as stated earlier. The organizations are also demanding to retain all the parts of the rule as was initially decided when it was framed.