Consumer advocates have long warned that payday lenders purposely try to lure borrowers into an expensive and debilitating cycle of debt. Now, the nation's consumer financial watchdog says it has proof.
The Consumer Financial Protection Bureau accused a leading payday lender, Ace Cash Express, of using a variety of illegal tactics to pressure customers with overdue loans to borrow more to pay them off.
The allegations against Ace marked the first time that bureau officials accused a payday lender of intentionally pushing people into a debt cycle.
Ace, with 1,500 storefront locations in California and 35 other states, agreed to pay $10 million to settle the case,...