Report 8B: Can Storefront Payday Borrowers Qualify for a $500 Installment Loan Under CFPB Rules?

nonPrime101 Report 8B by Rick Hackett

In Report #8 published on nonPrime101, this team asked the question: can a historical population of payday loan borrowers qualify for an installment loan under the standards laid out in CFPB’s outline of possible small dollar regulations published in March, 2015? CFPB has now published a formal and detailed (1300+ pages) set of proposals for underwriting payday and “high cost” installment loans. We have seen in our Report #9 that only 25%-33% of current storefront single-payment loan borrowers would pass the CPFB’s “ability to repay” screen, as applied to loans they actually received. This report answers the question: how would the same borrowers fare with a hypothetical “high cost” installment loan under the CFPB criteria?

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