The need for stricter payday lending rules demanding a requirement that lenders assess consumers’ ability to repay the loan was put forth by Senate Democrats last week in an attempt to impose stringent policies to reform the industry.
The 32 Senate Democrats urged the Consumer Financial Protection Bureau to consider stronger rules in order to maintain a balance between making resources available for the low-income borrowers and ensuring their ability to repay the loans. The letter that was addressed to the CFPB was organized by Senators Jeff Merkley of Oregon, Dick Durbin of Illinois and Chris Coons of Delaware.
“Predatory lenders should not be able to continue unfair, deceptive, and abusive acts or practices that are designed to trap borrowers in a cycle of debt,” the senators wrote in the letter, according to WSJ.
Regulators insist that the CFPB apply the same rules required to assess and approve buyers for a mortgage. But if the past is of any indication with regards to timeline, there could be possible delays in implementing this regulation.
CFPB’s rulemaking on debt collection, which was proposed in November of 2013, continued to drag on with a resolution which has been postponed until December this year with little hope of being passed at all, while the need for action only continues to grow stronger. Reports suggest that debt collection remains a most important cause of concern – the CFPB received 23,000 comments and 74,000 consumer complaints by November 2014.