Rules for payday loans vary state by state, and to date, there are no federal regulations overseeing the loans other than for service members in the military.

But now the Consumer Financial Protection Bureau says the industry needs reform and is looking at implementing what would be the first federal regulations. 

Payday lenders say they serve the “under-banked,” but few other products subject borrowers to such high interest rates. Critics charge that the industry offers predatory loans and targets the poor. So why have the loans been largely unregulated so far, and if regulations are doable, what might a regulated payday loan market look like?

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