New U.S. rule on payday loans to hurt industry, boost banks: agency

By Lisa Lambert and Pete Schroeder WASHINGTON (Reuters) - Revenues for the $6 billion payday loan industry will shrivel under a new U.S. rule restricting lenders' ability to profit from high-interest, short-term loans, and much of the business could move to small banks, according to the country's consumer financial watchdog. The Consumer Financial Protection Bureau (CFPB) released a regulation on Thursday requiring lenders to determine if borrowers can repay their debts and capping the number of loans lenders can make to a borrower. Republican lawmakers, who often say CFPB regulations are too onerous, want to nullify it in Congress, and the industry has already threatened lawsuits.

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