Abstract
The Dodd‐Frank Act of 2010 brings nonbank payday lenders under federal regulation for the first time. The question of precisely how to regulate the payday loan industry creates a number of difficult challenges for the newly created Consumer Financial Protection Bureau (CFPB). Whereas most consumer advocates would prefer to ban or strictly limit high cost payday lending activity and address unfair/abusive lending practices, theCFPBmust also be attentive to the impact of regulation on credit access for low‐wage, credit‐constrained payday borrowers. This article highlights the policy, legal, and institutional issues raised during theCFPB's decision‐making process. TheCFPBhas the opportunity to dramatically shift the longstanding consumer protection paradigm in favor ofreal‐worldprotection of vulnerable borrowers and, thereby, to realize the hopes of the activists who helped to bring the Bureau into existence.
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