The CFPB's Proposed Payday and Small Dollar Rule from an Economist's Perspective

Consumers’ payday and small loan decisions are inextricably tied to the unpredictability of work schedules, wages, and the timing of cash flows. For example, payday loans may be caused by small urgent expenses, such as an emergency car repair, or the lost income from missing work due to a car breakdown.

In this webinar, hosted by the ABA Consumer Financial Services Committee, Dr. Stephen Bronars and Dr. George Korenko will discuss how provisions of the CFPB’s proposed rule for payday loans are likely to interact with consumers’ borrowing decisions. They will also discuss the challenges facing payday lenders if they are required to measure the ability-to-repay a payday loan, the structure of the conditional exemption loans that are not subject to ability-to-repay, and how payday loans may compare to other sources of liquidity for consumers.