Final payday loan regulation adopted by CFPB

This story appeared in Bank Digest.                                  

The Consumer Financial Protection Bureau has adopted its anticipated short-term, small-dollar loan regulation. According to the Bureau, loans that require full or nearly full repayment at one time, such as payday loans, vehicle title loans, and deposit advance products, are the final rule's focus. Some longer-term loans that have balloon payment features also are covered. Most of the rule will take effect 21 months after it is published in the Federal Register.                                   

A core feature of the rule is a full-payment test for installment loans to ensure that consumers can afford their payments and still meet their basic living expenses and major financial obligations, although the rule provides exceptions to this test.