Pew Commends New Payday Loan Rule That Provides Consumer Protection for Short-Term Loans

Says Consumer Financial Protection Bureau offers opportunity for states and other regulators to make small installment loans safe

Pew Commends New Payday Loan Rule

WASHINGTON—Nick Bourke, director of The Pew Charitable Trusts’ consumer finance project, issued this statement on the Consumer Financial Protection Bureau’s final payday loan rule: 

“The CFPB took a strong step today to protect consumers from harmful, single-payment payday and auto title loans. The final rule is a major improvement over the 2016 proposal because it opens the door to lower-cost installment loans from banks and credit unions. But federal regulators and states still have important work to do. 

“Bank and credit union regulators must now create the clear guidelines these lenders need in order to make small installment loans safely and profitably. If they do, millions of consumers can save billions of dollars by gaining access to lower-cost credit. Banks and credit unions have shown a willingness to serve these customers with small installment loans, and they can do it at prices that are six times lower than payday loans. With strong safeguards in place, regulators should let them. 

“States should act quickly, too, because the CFPB’s rule left the regulation of high-cost installment loans to them. State legislatures can prevent the spread of today’s annual rates of 400 percent on payday installment loans by requiring affordable payments, lower prices, and reasonable time to repay.

 “The CFPB’s rule is well-balanced, curbing consumer harm while allowing for continued access to credit. These protections will improve the lives of millions of American consumers.” 

The Pew Charitable Trusts is driven by the power of knowledge to solve today’s most challenging problems. Learn more at

The front facade of the Supreme Court of the United States in Washington, DC.

Agenda for America

A collection of resources to help federal, state, and local decision-makers set an achievable agenda for all Americans

Quick View

Data-driven policymaking is not just a tool for finding new solutions for emerging challenges, it makes government more effective and better able to serve the public interest. In the coming months, President Joe Biden and the 117th Congress will tackle a number of environmental, health, public safety, and fiscal and economic issues—nearly all of them complicated by the COVID-19 pandemic. To help solve specific, systemic problems in a nonpartisan fashion, Pew has compiled a series of briefings and recommendations based on our research, technical assistance, and advocacy work across America.


States of Innovation

Data-driven state policy innovations across America

Quick View

Data-driven policymaking is not just a tool for finding new solutions for difficult challenges. When states serve their traditional role as laboratories of innovation, they increase the American people’s confidence that the government they choose—no matter the size—can be effective, responsive, and in the public interest.