Federal Payday Loan Consumer Protection Amendments of 2006

H.R. 5350, the Federal Payday Loan Consumer Protection Amendments of 2006, proposes to ban federally insured banks from offering payday loans or providing financing to other lenders for the purpose of making such loans. The bill would also amend the Truth in Lending Act to prohibit lenders from issuing payday loans that rely on a consumer’s personal checks or authorized bank account withdrawals as collateral. If enacted, this legislation would effectively eliminate the ability of traditional banks to participate in the payday lending market and restrict the methods private lenders use to collect high-interest, short-term debt from citizens' bank accounts.