PHOENIX – Consumer advocates are praising a new rule issued on Thursday by the Consumer Financial Protection Bureau. It requires payday lenders to start requires payday lenders to start verifying a borrower's ability to repay before rolling it over into a new loan.

The rule aims to prevent a situation where desperate people borrow more money just to repay prior loans, and get hit with fees that often exceed the amount of the original loan.

Diane Standaert, director of state policy at the Center for Responsible Lending, says this rule will curb some serious industry abuses.

"We know that the debt trap of repeat re-lending is the core of the payday lender and car-title lender business model," she says. "So, that's why this rule is a significant step forward in stopping the debt trap of unaffordable payday loans."

The new rule goes into effect in July 2019. It requires payday lenders to verify specifically that the person will be able to repay the loan and still cover living expenses and major financial obligations.

Payday loan industry supporters argue that this type of short-term loan offers credit and flexibility to people in financial distress.

In 2008, Arizonans approved a ballot measure that capped payday-loan interest rates at 36 percent - but Standaert says interest rates on car title loans weren't affected, so too many low-income families still end up having their vehicles repossessed.

"Unfortunately, Arizona still allows car-title loans at rates over 200 percent," she laments. "So, the legislature should move forward to cap the cost of car title loans while the CFPB rule may provide some relief around the unaffordable nature of those loans."

Conservatives in Congress are expected to try to repeal the rule using the Congressional Review Act before it even goes into effect. And in 2018, President Trump will get the chance to nominate a new head of the CFPB. Its current director, Richard Cordray, is a holdover from the Obama administration whose term ends next summer.


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Public hearings continue tonight and tomorrow for the proposed sale of Minnesota's second largest utility. The deal is drawing a lot of attention, with a private-equity firm behind the request. Minnesota Power serves more than 150.000 electricity customers in the northeastern part of the state.

If regulators say "yes," its parent company ALLETE would be sold to BlackRock's Global Infrastructure Partners and the Canada Pension Plan Investment Board.

Stephanie Kiero, a customer in this service area, said she worries about her rates going up for the wrong reasons.

"It seems to me like another case of 'the rich get richer' when things move in the private equity direction. I think there's different expectations about profit from private equity," Kiero said. "I mean, it's about 'make the most profit that you can in the shortest amount of time.' "

Analysts view this as a bellwether because these types of deals don't surface all the time. Minnesota Power does not anticipate customer rates being impacted, and it says this deal guarantees more resources in meeting the state's clean-energy goals amid spiking demand.

Tonight's hearing led by the Public Utilities Commission is online and runs from 6 to 8 p.m. Tomorrow's hearing is from noon to 2 p.m. at the Morrison County Government Center in Little Falls.

As for the clean-energy claims, skeptics say the deal undermines such efforts because of the buyer's link to fossil fuels. Hudson Kingston with the environmental group CURE also worries about transparency.

As a company with a public focus, ALLETE has almost immediate reporting requirements when issues arise. But Kingston warns that might change if this sale goes through.

"If they have accounting mistakes, if they have major shortfalls, that might not come out until an annual report to the PUC," he said. "So, that's very concerning. It really pushes a lot of their management into the shadows."

Minnesota Power contends it will continue as an independently operated, locally managed and regulated utility. Feedback from the hearings will be factored into the commission's decision, expected this fall. Meanwhile, Kiero says this is a polarizing issue in her community.

"I've talked to people who work at ALLETE that are super excited about the sale. I've talked to other people who just absolutely are against BlackRock's involvement with Enbridge and their track record with the environment," she said.

Enbridge is the Canadian oil company that operates the Line 3 pipeline across northern Minnesota.

Time is winding down for Minnesotans to upgrade their driver's license, with new federal rules soon to kick in for what's known as "REAL ID."

On May 7, federal officials will begin enforcing the REAL ID Act, adopted two decades ago in the wake of 9/11. The idea was to enhance the screening of phony identification cards but there have been repeated delays with the rollout. Now, state and federal agencies are reminding people to act.

Jody-Kay Peterson, director of driver services programs for the Minnesota Department of Public Safety, said they understand this is something many people might have pushed to the back of their minds. But for those 18 and older who will soon need a REAL ID, the waiting period is over.

"For those who have been holding off for a while, it is really happening," Peterson emphasized. "For you to get on a plane throughout the U.S., you will need to have a REAL ID-compliant document."

Other documents like a passport are acceptable but a standard driver's license alone will not get you through airport security. A REAL ID also is needed for visiting someone at a federal prison or a military site. The department said if such situations are not on your horizon, there's no need to rush before May 7, given the expected crunch of applicants.

You must complete the application process in person at a designated location but you can begin the paperwork online. While making the upgrade might seem like a headache, Peterson noted there is a level of convenience with REAL ID.

"The benefit of having a REAL ID driver's license or ID card, it's smaller, it's easier to carry around.," Peterson pointed out. "A passport, it's a bigger document."

The bigger document can make it easier to lose. Given the current application demand, the department said the average wait time to receive your REAL ID is 43 days. When you apply, you will need to bring certain documents, including one to proves your full name, date of birth and legal presence in the U.S. Also needed are two different documents showing your current Minnesota address, like a utility bill. Having your Social Security number memorized is another request.


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A new bill to make car shopping more transparent goes before the California Senate Transportation Committee Tuesday.

Senate Bill 766 would require dealers to disclose the full "out-the-door" price before a purchase. The legislation is meant to prevent people from getting tricked by offers that require certain add-ons.

Sen. Ben Allen, D-Santa Monica, is its sponsor.

"People need to be able to really understand what they're spending," Allen contended. "Some car dealers, you walk in and you're basically upsold - folks, they've ended up spending a lot more than they thought they were going to spend when they walked into the dealership."

The bill would require car dealers to tell consumers when an add-on is optional and it would require them to get customer approval before any add-ons. The Biden administration tried to put the rule in place nationally last December but a judge invalidated the attempt. The Trump administration is not expected to revive it.

The California Chamber of Commerce opposes new regulations on dealerships, saying they would lead to more lawsuits against car dealers and increased costs for consumers. Allen stressed he hopes the bill will do the opposite.

"By giving consumers some extra time and having greater transparency about what exactly they're spending, it'll reduce the likelihood for folks to file litigation to remedy the issue," Allen argued.

The bill would also give customers who bought a used car three days to return a vehicle for a full refund, with a small restocking fee.


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