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Brand new U.S. rule on payday advances to harm industry, boost banking institutions: agency

Brand new U.S. rule on payday advances to harm industry, boost banking institutions: agency

WASHINGTON (Reuters) – profits when it comes to $6 billion cash advance industry will shrivel under a unique U.S. guideline limiting loan providers’ ability to benefit from high-interest, short-term loans, and far regarding the company could relocate to tiny banking institutions, based on the country’s customer watchdog that is financial.

The customer Financial Protection Bureau (CFPB) released a regulation on Thursday requiring loan providers to figure out if borrowers can repay their debts and capping the amount of loans loan providers will make to a borrower.