People at their most desperate are at their most vulnerable. In an economy that’s booming, the wealth gap should be shrinking, not widening. Climbing the economic ladder for the working poor, especially for blacks and Latinos, is being threatened by payday loan lenders eager to exploit the situation with the help of the Consumer Financial Protection Bureau (CFPB).
Earlier this year in a contradiction of its very name, CFPB announced it would protect predatory lenders and not consumers. Instead of executing the first comprehensive federal rule that would curtail these lenders’ debt traps by requiring them to consider a borrower’s ability to repay, the CFPB plans to do the opposite.
Specifically, CFPB plans to remove a requirement in its 2017 rule governing Payday, Vehicle Title and Certain High-Cost Installment Loans that lenders determine a borrower’s ability to repay before extending credit.