WASHINGTON (MarketWatch) — A federal watchdog agency on Wednesday slammed so-called auto-title lenders, arguing the companies take advantage of short-term borrowers and leave them financially worse off.
The Consumer Financial Protection Bureau released a new report highlighting the dangers of such short-term borrowing for consumers who often lack other means to finance the purchase of cars and trucks.
The agency is aiming to craft new guidelines on auto-title loans, payday loans and other short-term financing, usually involving small dollar amounts, that the CFPB says hurt consumers more than they help them.
Proposals are circulating in Congress to tighten controls on these loans, but the odds of Republicans who control both chambers passing such rules this year appear slim at best. The CFPB has authority to act on its own, however.