Payday lending

The Consumer Financial Protection Bureau on Wednesday issued an advisory for banks and credit unions on how to prevent and respond to elder abuse.

The first protection a consumer needs is the assurance that any new reforms will not inadvertently drive all regulated credit from the market.

The Consumer Financial Protection Bureau faces a tough balancing act as it seeks to issues a proposal to rein in high-cost payday loans. A chief concern is what will replace payday lenders if federal regulations force many of them to shut down.

Endorsements from lawmakers such as Bernie Sanders and Elizabeth Warren of the U.S. Postal Service providing banking services overlook how a similar plan faltered after the Panic of 1907.

In what has become almost a grim ritual, Consumer Financial Protection Bureau director Richard Cordray faced a barrage of hostile questioning from Republican members of the House Financial Services Committee, who hammered him over everything from payday lending to regulatory relief for small banks.

A left-leaning group is attacking one of the most prominent Democrats in Washington as being insufficiently tough on payday lenders. The ad shows how once-obscure financial issues are commanding a higher profile this election season.

The White House and other Democrats have long pushed for banks to offer affordable small-dollar loans as an alternative to payday loans and other costlier credit, but banks have struggled to make them profitable and safe for consumers.

LendUp, which makes subprime consumer loans online and over mobile phones, announced Wednesday that it has raised $50 million in equity funding, plus an additional $100 million in debt financing.

Overlapping missions and jurisdictions are fueling competition between the Consumer Financial Protection Bureau and the Federal Trade Commission, according to former officials at both agencies.

After several years of tussling with mortgage rules and their implementation, the Consumer Financial Protection Bureau is focusing on several areas that will primarily affect the nonbank market, including debt collection, payday-type loans and prepaid cards.