The CFPB proposed rules divide covered loans into two groups: temporary and long run loans. Short term installment loans consist of items that are usually due from the borrower’s payday that is next well as single-payment automobile name loans. Of these loans, loan providers have the choice of performing a full-payment test or structuring the mortgage in a fashion that prevents the debtor from becoming caught with debt. The complete repayment test requires the financial institution to validate the borrower’s earnings (after fees), borrowing history (credit file check), and certain other key responsibilities the debtor might have (including fundamental cost of living such as for example meals, lease and medical expenses). Continue reading “New Era for Payday Lending: Regulation, Innovation while the Road Ahead”