EAU CLAIRE, Wis. (WEAU) -- Several people gathered outside an Eau Claire business today to protest payday lending.
The protesters say payday lending is out of control and burying people in debt.
But a new proposed rule might help those who borrow money.
The consumer financial protection bureau works to make rules "more fair" for consumers in consumer finance markets. Today, the bureau proposed a new rule to crack down on payday lending.
"It becomes a trap," Paul Miller with the Wisconsin Citizen’s Action Coalition of Eau Claire said.
Protesters, who gathered in Eau Claire Thursday, say people who borrow money from payday loan sources often get buried in debt.
"They're having enormous interest penalties and fees attached to loans they can't afford to take out in the first place," Miller said.
They say protection for those consumers who borrow money and can't pay it back is limited, but a proposed rule by the consumer financial protection bureau, who the protesters call a "watchdog for consumers," is aimed at ending payday debt traps.
"I don't think these proposals are going to damage the ability of these industries to make loans; it will regulate an industry," Mike Wollman with JONAH (Joining Our Neighbors, Advancing Hope) said.
Protesters say the way people get trapped in this type of debt is when they can't pay off their first loan in time, they take out more loans with higher interest rates.
"The bottom line is that we shouldn't be allowing these kinds of business models that really take advantage of and prey on people who are in vulnerable positions," Peter Skopec with the Wisconsin Public Interest Research Group said.
Under this rule, the payday lenders would have to make sure the people borrowing the money have the ability to repay their loans.
“My daughter almost fell into this practice a couple months ago,” Jeff Smith with Citizen Action Western Wisconsin Cooperative said. “I can't imagine the families who find themselves with young people who don't know any better and fall into this practice."
While the protesters say the practice of payday lending can be dangerous, there are people out there who need safe access to "fast cash."
"Our hope is that these regulations make it easier for more responsible lenders to enter that market and get that credit to people who really need it," Skopec said.
WEAU reached out to several payday lenders in Eau Claire, but they declined to comment.
The Consumer Financial Protection Bureau will be taking public comments through the middle of October on their website. You can find that link on the right.
The implementation of the rule will take up to 15 months.