WASHINGTON (Reuters) – profits for the $6 billion cash advance industry will shrivel under an innovative new U.S. rule limiting loan providers’ ability to benefit from high-interest, short-term loans, and far for the company could relocate to little banking institutions, based on the country’s customer financial watchdog.
The customer Financial Protection Bureau (CFPB) released a regulation on Thursday lenders that are requiring see whether borrowers can repay their debts and capping how many loans loan providers will make up to a borrower.
The rule that is long-anticipated must endure two major challenges before becoming effective in 2019. Republican lawmakers, whom usually state CFPB regulations are way too onerous, wish to nullify it in Congress, and also the industry has threatened legal actions.