June 2, 2016 – The federal regulators are planning to unveil new set of rules to the payday loan industry that has been duly charging many Americans with inflated interest rates on their loans. Most Americans have depended on these industry loans and have been accustomed in paying the amount that they have borrowed in two weeks; however, agreement may vary when loaners tend to pay their debts later that the set date. Most of these borrowers tend to routinely roll the loan over into a new one, disabling them from getting out of their debt; and most banks and debtors have been in this dilemma for the longest time.
Though most states have set out rules that essentially halt payday loans, this business have become fully developed and strengthened in more than 30 states with more than 16,000 and counting run online.
The new set of guidelines crafted by the Consumer Financial Protection Bureau requires lenders to check the income of their debtors and double-check if they are really capable of paying what they have borrowed; through this, the number of times that debtors can borrow money will be lessened. Since this new guidelines don’t need the approval of the Congress, this could be automatically implemented by next year. The administration of Obama believed that this move aims to protect the consumers as well as to encourage them to borrow only what they are capable of paying. They emphasized that the main purpose of lending is to address a certain financial matter by borrowing, and not on keeping those people who borrowed on the pit of their mercy.