Imagine being in a situation where you needed a few hundred dollars to buy important medications for a sick family member. That is a stressful situation to be in. Now, make the situation even more painful (and all-too-common in this country today) and factor in having a lower income, no access to traditional loans/lines of credit and no one else to borrow money for. Oh yeah, and you have no money saved up, no cash in your wallet and payday is two weeks away. What would you do?

This is the type of situation that millions of American consumers find themselves in multiple times a year. For a lot of these people, taking out a short term payday loan is the only way to get the cash that they need for emergency expenses. Of course, if you’ve read any online articles about payday loans in recent months then you probably know that certain groups, namely the CFPB, are on a mission to introduce new regulations that would dramatically impact the payday lending industry. The proposed regulation that the CFPB recently introduced may, in fact, result in about 85 percent fewer payday loans being made each year.

In the State of Florida, and in several other states, payday loans are currently readily available and successfully regulated at the state level. This is not good enough for the CFPB, as they obviously believe their new rules will be more effective in regulating the short term lending industry than the states already are. Critics of payday loans believe that lenders prey on lower income consumers. Even President Obama has said that these types of loans get consumers “trapped in a cycle of debt.”

Hundreds of thousands of Florida residents regularly take out payday loans to help “fill in the gaps” when they don’t have enough money to make it through until the next payday. When a household falls into the lower income bracket, it is not always easy to get the bills paid and to still have enough money left over to deal with any types of emergency expenses that might pop up. For years now these Florida residents, along with consumers in other states, have relied on payday loans to help them out with loans when they have emergency expenses.

Florida has been held up as a state that exemplifies meaningful payday regulations at the state level. These rules have allowed the state government to keep lending companies in check, while still making sure that short term, small dollar loans are available to the people of the state.

If the CFPB’s new rules go in effect around the country, all of those people who have previously been able to get by because of payday loans will have to seek out other means of borrowing money when emergency expenses occur. This could very well lead to a very bleak situation for lower to middle income American consumers all over the country. The simple fact of the matter is that without access to short term lines of credit, Florida citizens will not have money to pay some bills and to make necessary purchases.

This will not just be detrimental to the people that take out loans but to local businesses as well. When people can’t make as many purchases, small businesses don’t make as much money. And when payday lenders have to shut down their businesses (as might be the case if the new rules become the law of the land) then they have to fire employees. This, too, is bad for the bottom line in Florida and all other states where payday loans are currently available. No matter how it shakes out, the new payday lending rule from the CFPB seems bound and determined to cause more harm than good.

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