Payday loans are used by people with a long history of financial stress and cause bankruptcy, says Paige Marta Skiba, professor of law at Vanderbilt Law School.

President Obama is scheduled to speak about payday loans March 26, the same day the Consumer Financial Protection Bureau was to unveil new federal rules aimed at protecting low-income borrowers from predatory lending. Skiba has research showing that first-time applicants who receive a payday loan are nearly twice as likely to file for bankruptcy within two years as those denied the loan.

“Our research finds that payday loans and their interest payments may be sufficient to tip the balance into bankruptcy for a population that is already severely financially distressed,” Skiba says.