A chance to rein in payday loan abuse

A chance to rein in payday loan abuse

The Consumer Financial Protection Bureau has finally turned its regulatory gaze to short-term lenders — think payday loan and automobile title loan companies — that build businesses around loans that can't be repaid. The bureau floated a potential rule last week that addresses the central problem with such loans: borrowers being swamped with penalties and fees for loans they should never have been granted.

At the insistence of regulators, banks won't dole out loans or credit cards to customers who can't meet their borrowing standards. That practice has fueled the $46-billion market for payday loans, which just about anyone...