The Daily Caller reports on CEI's study by Hilary B. Miller on the Consumer Financial Protection Bureau's proposed pay day lending rule.
A new report Monday shows many Americans will be negatively effected by new regulations imposed on lending by the Consumer Financial Protection Bureau (CFPB).
The financial area most effected by these new rules is payday lending, according to the Competitive Enterprise Institute (CEI). Payday loans are short-term loans made to individuals through banks, lending businesses, and online stores. They usually carry a high interest rate and require the individual to write a post-dated check for the amount they wish to borrow.
“Federal regulators want more restrictions on payday loans, but that will hurt people who urgently need a short term loan but lack rainy-day savings or credit cards,” Harry B. Miller, author of the CEI report, tells The Daily Caller News Foundation.
Those seeking payday loans tend to be “younger, lower-to middle-income consumers, with incomes averaging about $35,000,” the report says. Payday borrowers are also far more likely to be “female, African American, or both.”
The report notes that the impact of the new CFPB regulations result in nearly a three-fourths revenue reduction in the payday lending industry. The results of that reduction, experts say, will be that many of the some 20,000 payday lending fronts in the U.S. will be rendered unprofitable and will be forced to close up shop.
Read the full article at The Daily Caller.