Payday lenders face new federal rules - WKOW 27: Madison, WI Breaking News, Weather and Sports

Payday lenders face new federal rules

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MADISON (WKOW) -- New federal rules on payday lenders could help some of Wisconsin's most vulnerable people.

The average payday or car title loan is just $300, but it also comes with an annual interest rate of 515 percent.
The federal Consumer Financial Protection Bureau released new rules this week stating payday lenders must do what is called a "repay check" on an applicant, before issuing a loan.

"That means payday and car title lenders will have to make sure that the potential borrower can repay their loan and afford regular living expenses for making that loan," said Peter Skopec, director of the Wisconsin Public Interest Research Group.

The new rules also limit how many high interest loans a lender can make to the same borrower in quick succession.

However, Skopec warned these rules will not help people with installment loans.
The CFPB is working on separate rules for those loans.

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