Turk File

Payday lenders cry foul on proposed regulation

Group is asking Sen. David Vitter for help, claims the feds are trying to gut the payday lending industry.

The Shreveport Times reported Monday that a Ruston businessman is among a group of small business representatives accusing the federal Consumer Financial Protection Bureau of trying to put the payday lending industry out of business.

Mickey Mays and six others have asked U.S. Sen. David Vitter, who is running for governor, and Rep. Steve Chabot of Ohio to stop the CFPB's attempts to implement a proposed new rule requiring lenders to ensure borrowers can pay back loans.

“We ask that you make sure the CFPB proceeds in a way that bolsters our ability to provide needed short-term loans for our customers,” Mays and others wrote in a letter to Vitter Chabot earlier this month.

Vitter is chairman of the committee on small business and entrepreneurship. Chabot is the chairman of a committee on small business.

CFPB spokesman Sam Gilford told the Times the agency issued an outline of the proposed rule in March and will release a final version by the end of the year for public comment. The goal is to protect consumers vulnerable to falling into debt traps, the paper reports.

As the Times notes, the payday lending industry long has been targeted by federal and state regulators. Lenders allow borrowers to take out short-term, high-interest loans often due by the customer’s next payday. Interest rates sometimes can be as high as 400 percent.

Read The Shreveport Times story here.