Thumbs down: A new deal for predatory lenders

Millions of Americans live paycheck to paycheck. Some of the most desperate got a little protection when the federal Consumer Financial Protection Bureau issued new rules for payday lenders. The consumer bureau was a creation of the Obama administration and the post-recession Dodd-Frank law. As it has with many other Obama era regulations, the Trump administration is seeking to abolish most of the payday lending rules.

Payday lenders, for the uninitiated, offer short-term loans at effective interest rates of as much as 400 percent. If borrowers fail to repay in two weeks, loans are rolled over with additional fees. Soon borrowers are on the road to bankruptcy. The Obama rules, enacted in 2017, barred lenders from making loans unless they determined borrowers had the wherewithal to pay off the debt, just as banks and mortgage lenders, and limited rollovers. Lenders complained that the rules reduced their profits. Rather than protecting consumers as its name implies, the financial bureau is moving to rescind the lending rules. Thumbs down.

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