U.S. officials are taking their first crack at writing rules for payday loans, responding to concerns that the short-term, high-rate debt can trap consumers in a cycle of borrowing they can’t afford, the Wall Street Journal reported today. The Consumer Financial Protection Bureau is exploring ways to require payday lenders to make sure customers can pay back their loans. The bureau is seeking to establish the first federal regulations for the $46 billion industry, which has historically been overseen by states. Consumer-advocacy groups say the loans are deceptive because borrowers often roll them over several times, racking up fees in the process. They also criticize high annual interest rates that can range from less than 200 percent to more than 500 percent, depending on the state, according to research by the Pew Charitable Trusts.
