The Consumer Financial Protection Bureau (CFPB) proposed new regulations Thursday to crack down on the payday lending industry.
Payday lending provides short-term access to credit, but usually comes with high interest rates, often in the triple digits, and expensive fees.
"The consumer bureau is proposing strong protections aimed at ending payday debt traps," CFPB Director Richard Cordray said in a news release. "Too many borrowers seeking a short-term cash fix are saddled with loans they cannot afford and sink into long-term debt. It's much like getting into a taxi just to ride across town and finding yourself stuck in a ruinously expensive cross-country journey. By putting in place mainstream, common-sense lending standards, our proposal would prevent lenders from succeeding by setting up borrowers to fail."