The Consumer Financial Protection Bureau will soon release the first draft of federal regulations to govern a wide range of short-term loans, the New York Times reported today. The rules are expected to address expensive credit backed by car titles and some installment loans that stretch longer than the traditional two-week payday loan, according to industry lawyers, consumer groups and government authorities briefed on the discussions. Certain installment loans, for example, with interest rates that exceed 36 percent will most likely be covered by the rules. For now, with the prospect of federal rules on the horizon, some payday lenders have begun aggressively lobbying a number of states, including Kentucky, Washington and New Mexico, tapping a former governor as a lobbyist in one battle, to weaken state laws restricting expensive loans or to quash new caps before they gain ground. The lenders contend that if the federal rules are too burdensome, extending loans would become simply too expensive, choking off a form of credit that, while costly, is the only option for millions of Americans.
