Payday Lending

A coalition of more than 100 Democratic congressional representatives wrote to Consumer Financial Protection Bureau Director Kathy Kraninger, urging her to reconsider the bureau’s final rule delaying implementation of its 2017 payday lending rule.

The House members, led by Financial Services Committee Chairwoman Maxine Waters (D-Calif.), condemned the delay as a giveaway to payday lenders at the expense of consumers.

Find out more about what the legislators had to say.

Four months after proposing to rescind and delay compliance with its 2017 payday lending rule’s mandatory underwriting provisions, the Consumer Financial Protection Bureau (CFPB) revealed a final rule amendment to add another year to the proposed delay.

Such delays align with advocacy by banks, credit unions and payday lenders, but have drawn the ire of consumer advocates and Democrats.

Find out more details about the delay and what feedback the bureau has received.

The National Credit Union Administration (NCUA) is in the process of finalizing six rules and has just as many in the proposal stage in the agency’s Unified Agenda for Spring 2019.

Among the items noted in the agenda are the agency’s final rule on payday alternative loans (PALs) and an expected proposed rule regarding the interest rate cap on loans issued by federal credit unions (FCUs).

Find out what else was included in the agenda.

The Consumer Financial Protection Bureau’s (CFPB) first Unified Agenda released under Director Kathy Kraninger shows that the agency is planning to issue two long-awaited final rules in June and is moving forward with certain rulemaking activities suggested by former acting director Mick Mulvaney.

The bureau’s statutorily-required business lending data collection rulemaking, which has been pushed back multiple times, has been moved up in the latest agenda. Rulemaking to clarify the meaning of “abusive” as it relates to the bureau’s UDAAP authority has been added to the bureau’s “long-term” rulemaking agenda.

Learn more about what to expect from the bureau from the agenda.

In her first statutorily required appearance before Congress as director of the Consumer Financial Protection Bureau, Kathy Kraninger was asked to address the bureau’s plans pertaining to its enforcement of fair lending laws, its stance on ongoing litigation against companies, restitution for harmed consumers and its rules regulating payday lenders and overdraft services.

Questions from Democrats were reminiscent of previous challenges to Kraninger’s commitment to the bureau’s mission, and many pertained to changes enacted under former acting director Mick Mulvaney. Republicans decried Democrats for “badgering” Kraninger and defended her and Mulvaney. 

Find out more details about her testimony.

The Consumer Financial Protection Bureau (CFPB) recently published a compliance guide to help small entities account for the payment-related provisions of its payday lending rule. The guide does not address any of the rule’s ability-to-repay underwriting provisions, which the agency has proposed to rescind.

Specifically, the guide details what loans are and are not covered under the rule, how the rule applies to lenders and service providers, prohibited payment activities, consumer disclosure requirements, compliance disclosure requirements and recordkeeping requirements.

Find out more specifics about what the guide covers that could help lenders and service providers.

Something has been missing in some of the most recent settlements facilitated by the Consumer Financial Protection Bureau (CFPB) that had been a mainstay of its consent orders under former Director Richard Cordray: restitution.

That fact did not go unnoticed by the House Financial Services Committee and presented a timely opportunity for Dodd Frank Update to reach out to Goodwin Proctor Partner and former CFPB head of enforcement Anthony Alexis to get an insider’s take on the process of determining whether redress is warranted.

Find out more details about the letter and what our source had to say.

As consumer advocates condemn the Consumer Financial Protection Bureau’s (CFPB) proposal to rescind ability-to-repay (ATR) underwriting requirements from its payday lending rule, various banks and credit unions feel encouraged by what such an action would mean for certain payday alternative products they’ve worked to develop.

CUNA Senior Director of Advocacy & Counsel Alexander Monterrubio spoke with Dodd Frank Update about how the proposed changes would benefit credit unions and other institutions offering forms of short-term financing covered by the rule as it stands. 

Find out what he and others in the industry had to say.

The Consumer Financial Protection Bureau’s recent settlement with payday lender Cash Tyme directed the company to pay a civil money penalty and redress harmed consumers, making it the bureau’s first enforcement action requiring restitution since Kathy Kraninger became director.

The bureau asserted that the company harmed consumers through unauthorized debits and lacked adequate processes for timely, effective remediation in such instances.

Find out more about the bureau’s allegations against the company and restitution requirement.

The Consumer Financial Protection Bureau has proposed to rescind ability-to-repay and mandatory underwriting provisions of its small-dollar lending rule.

The bureau separately proposed to delay the implementation of mandatory underwriting requirements by 15 months to solicit and review public feedback.

Find out what the industry is saying about the proposal and what it would not change about the rule.