Comment on Payday Lending

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On October 7, 2016, Thaya Brook Knight submitted a comment letter to the Consumer Financial Protection Bureau (CFPB) questioning its authority to issue the recently proposed rules on the short term loans known as “payday” loans. The rule, Knight argues, would effectively cap interest rates at 36 percent, despite a provision in the Dodd-Frank Act expressly withholding from the CFPB the authority to impose rate caps. Knight also argues that the effective rate cap would drastically reduce the availability of payday loans, and that effecting a ban through regulation, absent authority to implement an express ban, also exceeds the agency’s authority.