CONTACT: Justin Kolber, Assistant Attorney General, (802) 828-5620
October 20, 2017
The federal Consumer Financial Protection Bureau (CFPB) announced a national rule that will eliminate payday loan debt traps by requiring lenders to ensure that borrowers can repay their loans. Around 12 million Americans use payday loans. The new rule is estimated to eliminate two-thirds of the payday loans currently offered across the country. The Vermont Attorney General’s Office worked closely with the CFPB and other states to help shape the rule. “This rule is a great example of state and federal cooperation to address a financial problem that affects millions of working Americans,” said Attorney General T.J. Donovan.
Vermont already bans payday loans and other forms of high-interest lending. The rule will not affect Vermont’s laws, but will help raise the floor of protections in other states where payday loans are offered. Since 2012, Vermont has been a leader in protecting consumers from harmful lending practices, including cracking down on illegal online lending and working with Google to ban advertising for payday lenders.
For more on Vermont’s lending laws and enforcement efforts, visit the Attorney General’s “Illegal Lending” webpage.
Last modified: March 12, 2018