Government takes aim at pay day lenders, calls it a debt trap

New rule would force lenders to vet borrowers
Posted at 6:24 PM, Aug 18, 2016
and last updated 2016-08-18 18:24:37-04

An estimated 70 percent of Americans live paycheck to paycheck. Some of them rely on payday lenders when the money runs out before the end of the month.

The Consumer Financial Protection Bureau (CFPB) has proposed a change targeting what the government calls pay day debt traps. Primarily, the new rule would require lenders to take steps to make sure customers can afford to repay payday, auto title and certain other high-cost loans.

CFPB Director Richard Cordray said, "Too many borrowers seeking a short-term cash fix are saddled with loans they cannot afford and sink into long-term debt.”

Now, a website called has come out swinging at the government's proposal. The site states people may not be able to get short-term loans if the rule is passed. It gives people access to a petition and their lawmakers' contact information.

Depending on whose side you're on, you can make your voice heard. The government is taking public comment on this issue until October 7.