Nick Bourke of The Pew Charitable Trusts Reflects on the Five-year Anniversary of Dodd-Frank
When Dodd-Frank created the Consumer Financial Protection Bureau (CFPB) in 2010, it gave the agency authority to regulate high-cost, small-dollar loans, including payday loans. This is important because unaffordable payments and excessive costs have caused difficulties for the millions of borrowers across the U.S. who utilize these types of loans.
The CFPB has put forth a framework to improve the small-dollar loan market, outlining rules all lenders would have to follow while establishing safeguards for consumers. According to Nick, “The CFPB is rightly focusing on things like ability-to-repay standards so that lenders are responsible for structuring their loans with more manageable payments that people can pay off over time, so that people who are financially struggling have a chance to get back on their feet – however, there’s significant room for improvement.” For more of Nick’s insights on this CFPB milestone, please view his analysis, “The CFPB Five Years after Dodd-Frank: Meaningful Payday Loan Reform is Within Reach.”