The Consumer Financial Protection Bureau’s payday lending rule announced Thursday drew praise from the left, criticism from the right and predictions of lawsuits from an industry lawyer.

The bureau said Thursday it was finalizing a rule that would regulate payday and auto title lenders whose annual percentage rate of interest exceeds 36 percent. The bureau estimated there are 16,000 payday storefronts in the 35 states that allow high-interest, short-term loans typically guaranteed by the borrower’s next paycheck.

The rule, which has been expected for months, would broadly require lenders to make sure that the borrowers can afford to repay the debt as well as have the money for living expenses.

“The CFPB’s new rule puts a stop to the payday debt traps that have plagued communities across the country,” CFPB Director Richard Cordray said in a statement. “Too often, borrowers who need quick cash end up trapped in loans they can’t afford. The rule’s common sense ability-to-repay protections prevent lenders from succeeding by setting up borrowers to fail.”

The rule has several requirements:

  • Lenders must determine that a borrower can repay the loan and still meet living expenses and major financial obligations for 30 days after the loan period.
  • Lenders are prohibited from making new loans to a borrower for 30 days after a borrower takes out three consecutive such loans in quick succession.
  • Lenders are limited to two consecutive unsuccessful debit attempts on a borrower’s account. The bureau found that some lenders repeatedly attempted to debit borrowers’ accounts, leading to excessive bank fees and frequent closing of bank accounts. • Mark Furletti, an industry attorney, said a CFPB study of the rule first proposed in June predicted the industry would contract by 80 percent as a result. The 1,690-page rule has changed somewhat, doesn’t go into effect for 21 months, and includes interim deadlines for lenders to meet, but Furletti said it will slowly put small-amount lenders out of business.

“I’m pretty sure they expect the rule to basically put this piece of the industry out of business,” he said.

Furletti said he expects the industry will challenge the rule in court and congressional Republicans will attempt to repeal it using the Congressional Review Act. He also noted that Cordray’s term is up in July 2018 and President Donald Trump’s appointees have tended to try to roll back rules promulgated by Obama-administration officials.

Cordray and congressional Republicans have long been at odds over the agency's structure and its work. In July, the CFPB finalized a rule that would bar companies from compelling consumers to opt for arbitration in disputes. The mandatory arbitration clauses prevent consumers from joining class-action lawsuits.