Analysis & Comment

Opinion | Regulating Payday Loans

To the Editor:

Re “Mr. Trump’s Payback for Payday Lenders” (editorial, Feb. 13):

Like many well-intentioned regulatory measures, the Consumer Financial Protection Bureau’s regulations for payday lenders — which the Trump administration wants to roll back — actually harm those whom they are intended to help.

For many citizens of limited means, payday loans are the source of last resort for critically needed short-term funds. And yet these burdensome regulations, including requirements that the lender determine whether the borrower can “afford” the loan, will surely make it insufficiently profitable for many of these payday lenders to continue to operate and will cause many of them to leave the business altogether.

Those who support the bureau’s measures decry the high interest rates these lenders charge for these risky loans and tout the “savings” borrowers will derive from the regulations. But those consumers who, as a consequence of these regulations, are unable to obtain payday loans, and instead lose their car or house to foreclosure, will be nameless, faceless victims of another well-meaning but counterproductive governmental regulatory scheme.

Kenneth A. Margolis
Chappaqua, N.Y.

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