this is "nightly business report." with tyler mathisen and sue herera. quick cash. but it comes with big costs. today the government proposed new rules to change the payday loan industry as we know it. no decision. is opec losing its long-held power to control the price of oil? big risk, big reward. why home flippers are no longer going after foreclosures, but instead making bigger gambles on better homes. all this and more tonight on "nightly business report" for thursday, june 2nd. washington is now cracking down on a part of the financial services sector, payday loans. these loans are typically small and short-term but with very

high interest rates. sometimes, believe it or not, topping a 300% annual rate. the goal, it says, is to protect consumers from risky financial products. the industry is bigger than many think. its market size, $39 billion in revenues. according to pew research, about 12 million americans use payday loans every year. there are some 20,000 payday lending outlets nationwide. even though the practice is banned in 14 states. that's more than the number of mcdonald's, which is seemingly everywhere, with 14,000 restaurants in the u.s. here's eamon javers with a look at the proposed rules. >> reporter: in kansas city, missouri, today the consumer financial protection bureau announced proposed new rules designed to keep people from getting trapped in a spiral of debt from unpaid payday loans. the bureau's director said the move was designed to protect

often-vulnerable borrowers from what can be painfully high interest rates. >> the very economics of the payday lending business model depend on a substantial number of their customers being unable to repay the loan and borrowing again and again the high interest rates, incurring repeated fees as they go. >> reporter: it proposed rules would require lenders to determine if borrowers condition afford to pay back their loan and would restrict new loans if a customer has outstanding debt. it would apply to payday loans, auto loans, and advanced products. the rules could block credit from millions of americans who don't have any other options in the banking industry, critics say. still, the rules don't require congressional approval and could go into effect as early as next let's turn to our two ghosts who have opposing views on the government's proposed new rules for the payday lending industry. joining us tonight are dan dplotny, president of the california financial services providers association, an

industry trade group for payday ledders. as well as ceo of payday money centers. diane standard, she is the director of state policy with the center for responsible lending. thank you both for joining us tonight. let me start with you, dan, if i could. some of these practices have been called abusive lending practices, yet millions -- quite a bit of americans need to access it. make the case that it is not abusive and that perhaps some of these new rules don't need to go into effect. >> well, sue, thank you for having me. unfortunately, i think there's some confusion about this. that a lot of people consider them abusive but as we see here in california, we've got over 1.8 million customers that use these loans and they do not find them abusive. in most states that regulate this, it's highly regulated. it's authorized by statute and in california our regulators are seeing us at every location once every two years.

we look at complaints from consumers and see it's less than -- it's not even 1% or .5%. so consumers seem pretty satisfied with it. and they're hoping that this option won't be taken away from them. >> diane, do you agree with dan? one, are most consumers happy with the service and product that they're receiving from these payday lenders, one? number two, are the states doing the good job in protecting customers that dan thinks >> payday loans typically cost, as you said, over 300% annual interest. in california payday lenders can charge 450% annual interest. these payday loans are really designed to be a debt trap. over 75% of all payday loan fees are due to borrowers who are stuck in more than ten loans a year. these create devastating financial consequences for borrowers whose income is about $25,000 a year. these consequences include overdraft fees, delinquency on

other bills, and bankruptcy. and there are 14 states plus the district of columbia who are doing a great job at protecting their consumers by enforcing a rate cap of about 36%. but other states -- >> are the proposed rules which run some 1,300 pages, i read -- i haven't read them, but 1,300 pages, are they going to fix the problem that you see? >> these rules ar real step in the right direction to prevent the payday loan debt trap. in order to be effective they really must be strengthened and to close some of the loopholes that exist. at the heart of these rules is simply asking lenders to assess whether or not that loan is affordable to the borrower in light of their income and expenses. to simply ensure the borrower can repay that loan without having to continually reborrow or default on other expenses. we're looking forward to the help these rules can provide if done correctly. >> dan, let me let you respond. the term debt tral, first of all would you like to address that? second, do you at your

facilities assess whether or not the borrow are can actually repay the loan? >> of course, sue. we will -- obviously the lenders in our association and our company, we wouldn't lend money to somebody we think won't be able to pay us back. consumers that want this credit, we are going to make sure that we have the ability to recover that money and that it's going to benefit them and not harm them. unfortunately, diana has mentioned that the rules aren't strong enough, but the way -- it's 1,300 pages long. we haven't gotten through it all year. but we're concerned it's going to choke out a number large of regulated lenders. when these consumers don't have a regulated lender to go through, and we see that in some of those stays she mentioned, there's not an industry there. they maybe find somebody not licensed online. we see complaints in california, the majority from customers seeking out unlicensed, unregulated lenders out of state. we're worried th wit more borrow are.

>> are the tighter underwriting standards which some have likened to the standards for applying for mortgages, would it put you out of business? >> we've seen studies that show should could put us out of business. if what i understand, and i haven't read through the 1,300 pages, it's pretty devastating. and we have less than 3% default rate here in california. so i'm trying to understand why something that large is necessary here when we don't seem to have the problems that they're trying to fix on a nationwide business. some of our lenders, small businesses, will be put out of business if this isn't rethought. >> we'll have you back as we work through the 1,300 pages. thank you, we appreciate it very much. on wall street, stocks started the day lower then drifted higher but traders say investors were hesitant to make any big moves ahead of tomorrow's unemployment report. or employment report. which we'll have more on momentarily. a rally in health care stocks sent the s&p to its highest

close since november. the dow jones industrial average did gain 48 points to finish at 17,838. nasdaq added 19. the s&p 500 was up 5. the glut of oil on the market isn't going anywhere any time soon. opec failed to agree on an output ceiling and decided not to change its production policy. but that failure to reach an agreement was offset by a government report that showed a decline in oil stockpiles resulting in a slightly higher settlement for crude. as brian sullivan reports from vienna, today's meeting was not without some dra >> reporter: for the second time in two months, opec members failed to agree to a deal to limit oil production in the hopes of sending crude oil prices higher. unlike the informal april summit in doha, this was an official opec meeting. some members -- venezuela notably -- wanted the group to agree to cap output.

prices have bounce observed their lows. nigeria's oil minister told us $50 per barrel isn't the right price for them. >> a fair price for us per barrel this year, hopefully next year. >> reporter: despite the lack of production deals the oil minister from saudi arabia, the first new opec representative from that country in 25 years, talked up the meeting and the oil market. >> we are extremely happy. i think the market is in good shape. the market is balancing. trends are all good in terms of supply and demand. prices have recovered somewhat. and i believe they will continue to recover. the spirit of the meeting is very cooperative, collaborative. all of the ministers see basically the same fundamentals. >> reporter: the meeting comes at a time when many feel opec is losing its long-held power to control the price of oil. a big drop in production for the united states has helped push

prices up, doing some of opec's work for it. but if oil prices turn back lower, look for opec to take a third swing at striking another production deal when they meet again on november 30th. for "nightly business report" in vienna, austria, i'm brian sullivan. the european central bank met to discuss monetary policy. just like opec, it too did not make a policy change. though the head of the ecb expressed caution when discussing the eurozone's economic recovery, he also addressed one of the biggest risks to that region's economy. >> ecb has a view whereby the uk should remain in the european union because the european union will benefit from its permanence and we believe that uk too would benefit from staying in the europe the ecb is ready to work on contingencies. >> mario draghi left the door

open to fresh stimulus if inflation remains below target. positive news on the job market. two new reports suggest the labor market remains on solid footing. as hampton pearson reports, attention now turns to the biggest economic release of the week, may's monthly employment report. >> reporter: one day before the government releases the may employment report, more signs of a strengthening job market. first-time unemployment claims fell by 1,000 last week to 2,067. and a closely watched survey of private-sector jobs predicts an increase of 173,000 in may. >> the fact that job growth is starting to slow at the same time that wage growth is starting to accelerate, with a record number of open job positions, suggests it's a supply side issue. >> reporter: the consensds forecast for may predicts employers adding 162,000 workers to payrolls with unemployment

dropping to 4.9%. the x factor, the month-long strike by more than 35,000 verizon workers who did not get paid during the payroll survey week and were counted eed as unemployed. the federal reserve that is sign its intention to raise interest rates soon if job gains continue along with other data showing more signs of economic growth. >> the threshold first of all is lower than the markets in terms of overall employment gains and what they feel comfortable, if they feel 100,000 is okay with them to keep the unemployment rate steady. >> reporter: another report shows even planned private-sector layoffs are at a five-month low, due in part because of the recent rebound in oil prices. meanwhile, that next meeting of the fed is less than two weeks away. for "nightly business report," i'm hampton pearson in washington. still ahead, why the war against cancer is getting more e

house speaker paul ryan says he is ready to vote for the presumptive presidential nominee, donald trump. he made the announcement in an opinion piece in his hometown newspaper "the janesville gazette." slightly lower circulation than "the wall street journal." hillary clinton went after trump .n california during a foreign >> donald trump's ideas aren't just different. they are dangerously incoherent. they're not even really ideas. just a series of bizarre rants, personal views, and outright lies. he is not just unprepared.

he is temperamentally unfit to hold an office that requires knowledge, stability, and immense responsibility. >> john harwood joins us from washington. it's heating up. start with ryan's endorsement of trump. i guess it was predictable on one level. what changed his mind? >> i'm not sure anything changed his mind except the fact that he is a major lead ever of the republican party, he's going to be chairing this convention. when i interviewed him a couple of months ago he said, what can i do? i'm chairman of the convention, i'm not a fr. he established some distance. but then when they met a couple of weeks ago he said, i like what i saw. so it was clear he was headed this direction. he did it in a very low-profile way, not with an appearance alongside destructive, but rather through this op ed and the tweet he sent out. >> john, let's turn to ms. clinton who has attacked donald trump many times before. but this time she did it in an address. what was differe

>> what was different was that she tied the aspects of donald trump's words, his personality, his demeanor on a day-to-day basis, and cast it as a risk both to the american economy and to national security. it was a scathing indictment that was delivered in a very forceful way by mrs. clinton, and it's one that donald trump has only responded to so far with a tweet. we can expect to get a lot more from him later. >> why was she spending so much time on mr. trump today in the context of a foreign policy speech in california when she still has sort of unfinished business in california wit >> she does have unfinished business, tyler, but there's no better way for her to clean up that unfinished business and to attract support from fellow democrats than to go very hard after donald trump. everyone in the party sees that he's going to be the candidate. they know that she is highly, highly likely to be the

democratic candidate. if she's trying to close that deal by going as hard as you possibly can at donald trump, that is a unifying tactic within the democratic party. >> john harwood, thanks very much. sales slide at the gap but not as much as feared. and that is where we begin "market focus." the company's key metrics, same-store sales in may, fell 6%. that was better than expected. despite posting declines across each of its brands, the company said it did see improvement over the memorial day weekend. gap rose nearly 4.5% following the news while ending the regular session up more than 2% to 18.31. shares of biotech company namt health popped in their market debut. the company offered 6.5 million shares at $14. namt health ceo spoke about one of the company's latest va >> we're launching this diagnostic test that is clear cap city guide, covered by

insurance, to basically inform now doctors and patients about information about the cancer that was never available bef and i think this test is a reflection point that will transform not only how we make diagnoses at a molecular level but also how we share this information across a platform on a national scale. >> shares soared nearly 33% to 18.59. oracle has been sued by a former senior finance manager who alleges she was fired after refusing to take part in unlawful accounting practices. the business software company has since defended its business methods and plans to counter sue for malicious prosecution. shares were off about 4% on the trading session to finish out the day at 38.66. a surprise loss and weaker than expected revenue caused shares of the furniture retailer kahn's to plummet.

they lowered revenue guidance for the full year. shares cratered 26% to 8.63. and mcdonald's is reportedly close to reaching a deal to move its headquarters from oak brook, illinois, to oprah winfrey's former harpo studios campus in chicago. this according to crane's chicago business. the fast food chain is in advance negotiations with the chicago developer sterling bay. mcdonald's shares up 9 cents to 121.17. berkshire hathaway ceo warren buffett raising the stake again in phillips 66 by more than 500,000 shares, according to an s.e.c. filing. berkshire has been adding shares over the past few weeks and now has a stake of more than 15% in the company. shares of phillips 66 down marginally at 80.83. sad news in the business world tonight. the man responsible for escalating the cola wars in the 1980s has passed away.

former pepsi ceo roger enrico, best known for transforming the brand into a pop culture leader by signing deals with michael jackson and madonna, died at the age of 71. he served as chief executive of the company from 1996 to 2001. today we also learn that prince died from an accidental overdose of a powerful painkiller, the synthetic opioid fentanol, which is more potent than heroin and morphine by a long shot. find gsds of the medical examiner confirm suspicions the drug we've been reporting on was a player in the musician's death. the world's biggest cancer research conference starts tomorrow in chicago. in addition to the advances being made medically, one topic has been a key feature of the conference for the past several years. it is the cost of treating cancer. as meg terrell reports the nus are on the rise. >> reporter: global spenting on cancer medicines reached $107

billion in 2015. according to a new report from industry researcher ims institute for health care, it's expected to reach $150 billion by 2020 as newer, pricier drugs are adopted into use. last year's figure is up more than 11% from 2014 on a constant dollar basis. also contributing, price hikes on older medicines as well as more patients receiving treatment and for longer durations. though new therapies are pricier the report is many come with significant benefits, extending life by months over previous treatment. access to these new drugs isn't equal around the globe. there from 49 new cancer drugs approved 2010-2014 but only six countries had access to more than half of them. reimbursement to therapies poses a barrier to access in many places. the size of the market is likely a major reason pharmaceutical companies are investing in ca ed medicine.

the pipeline of cancer drugs and clinical development has expanded by 63% in the last decade. there are now almost 600 experimental cancer drugs in the advanced state of clinical trials. for "nightly business report," i'm meg terrell. fiction xer-uppers, why hom flippers are not going after friday's a big day for the economy. we told you earlier the unemployment or employment report for may is due out. expe expectations are of a 160,0001m jobs to be added. charles evans and fed governor

lyle brainard are scheduled to speak. factory orders and the ims services reports are out and that is what to watch friday. americans are spending more on cars and trucks and in the process borrowers are paying more and making payments over a longer period of time than ever before. according to experian, the average auto loan has topped $30 f thousand for the first time ever. the average term of the loan, 68 months, the longest averagexper mortgage rates continue to inch higher amid market speculation that interest rates may be steered higher by the federal reserve. freddie mac reports that the 30-year fixed-rate mortgage averaged 3.66% in the latest week, up slightly from 3.64% the prior week. rising home prices are bringing house flippers back. it's not all about finding foreclosures to flip.

there aren't many of those left anymore. this time it's a bigger gamble on better houses. and as diana olick reports, potentially bigger rewards. >> that kind of matches the windows. >> reporter: if you don't have cash and a strong stomach, you shouldn't be flipping houses. at least according to veteran house flipper dana wright. >> insulation. when did you guys do this? >> reporter: this is rice's fourth flip. mistakes just keep getting higher. >> you have to be ready to move quickly, you have to understand that it's going to be an all-cash deal and somebody could want it more than you so have your threshold ready so you're not making choices you're not happy with later. >> reporter: rice and her husband paid $680,000 cash for this bethesda, maryland, home in a pricey neighborhood. it was small, just over 1,000 square feet. she's doubling the size and gutting everything, adding $500,000 of upgrades. >> that's how you build a house.

>> reporter: but she expects a 15% to 20% return. more than she would get on a foreclosure in a less-desirable neighborhood. >> i think that the distressed property makes a great story. but in real estate, it's always location, location, location. so in the locations where there might not be as many distressed properties, there's actually a great room for improvement. >> i'm representing the women of the world. >> reporter: the share of home sales that were flipped jumped 20% in the first quarter of this year from the previous quarter to the highest level in two years. and the returns are rising as well. the average gross profit for flippers was more than $58,000, the high nest over a decade. flipping a house in a high-end neighborhood like this one definitely means more cash up front. but not necessarily more risk. going to a cheaper neighborhood means you might not get back what you put in. >> you buy a $300,000 house, put

$50,000 in hoping to get $400,000 and they get $350,000 because the market doesn't support it. bethesda is more forgiving, you can get your money back. >> this is a dream kitchen. >> reporter: as returns grow, so do the ratings on all those house flip reality shows. if you think the drama is all made up, it is not. >> that actually happened. it's either new plumbing from the main line, we had to tear off an entire section of a house and rebuild it, that wasn't in the . but in the end, you know, you know that. you make contingency plans to make sure that you can accommodate whatever you see when you start working. >> reporter: and just hope that extra cushion pays off when the buyers come calling. for "nightly business report," diana olick bethesda, maryland. >> to read more head to our website nbr.com. the giving pledge has new members. the three billionaire cofounders of the online lodging website airbnb have joined the

philanthropic initiative founded by warren buffett and bill and melinda gates, they're the youngest to sign the pledge so far. plus sales force founder mark benni off added his name to the list, along with 13 other individuals or families. members of the giving pledge promise to give a majority of their wealth to philanthroper causes. that does it for us on "nightly business report." i'm sue herera. >> i'm tyler mathisen. have a great evening, see you back here tomorrow.

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