New Era for Payday Lending: Regulation, Innovation plus the Road Ahead

New Era for Payday Lending: Regulation, Innovation plus the Road Ahead

The CFPB proposed rules divide covered loans into two categories: temporary and long term loans. Short term installment loans include items that are usually due in the borrower’s next payday as well as single-payment automobile name loans. Of these loans, loan providers have the choice of performing a full-payment test or structuring the mortgage in a fashion that prevents the debtor from becoming caught with debt. The complete repayment test requires the financial institution to validate the borrower’s income (after fees), borrowing history (credit history check), and certain other key responsibilities the debtor could have (including fundamental cost of living such as for example meals, lease and medical expenses). Read More