The CFPB has proposed a final rule that prohibits a lot of the worst practices in the Payday Loan industry as well as practices involving Auto Title Loans and other abusive loans. These regulations are primarily intended to get people out of the “debt trap” that happens when you are forced to roll over payday loans. The regulations include limits on roll-over, includes a provision that the lender must consider the borrower’s ability to pay, and it includes a provision that subsequent loans must be in a declining amount. There are other provisions that prohibit multiple attempts to deposit dishonored payment checks, a practice which can generate ridiculous NSF fees.
All of that is good news. Now the bad news: The rule doesn’t go into effect unitl July 2019 at the earliest. In the current political climate that means that lender funded special interest groups have over a year and a half to go after the rule in Congress.
In the meantime, payday loans are covered to the greater or lessor degree by state legislation. Indiana (my home state) actually has a pretty good law.
Here is information on the CFPB Payday Loan Rule from National Consumer Law Center. If you are stuck in a bad situation regarding payday loans or other high interest loans, find a consumer attorney near you through the National Association of Consumer Advocates
here.