Payday Lending

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.

Although the financial services industry supports the Consumer Financial Protection Bureau’s (CFPB) proposal to rescind provisions of its payday lending rules placing strict underwriting standards on small-dollar loan products, Democrats and consumer advocates came out strongly opposed to the move.

Critics argue that the proposal is tantamount to the bureau, and by extension the Trump administration, siding with the payday lending industry, and a sign that CFPB Director Kathy Kraninger is following in the footsteps of her predecessor.

Find out more about the opposition to the bureau’s proposal. 

The Consumer Financial Protection Bureau (CFPB) recently settled with numerous foreign-based organizations involved in a payday lending operation for alleged violations of the Consumer Financial Protection Act and the Credit Practices Rule.

Although the CFPB initially sought restitution and disgorgement in the matter, and the court ruled it had sufficient evidence to do so, the final consent order did not call for it.

Find out about some of the key events occurred from the initial complaint filing to the final settlement.

The Consumer Financial Protection Bureau recently announced a $3.2 million settlement with Enova International, Inc., an online payday and installment lender, for debiting consumer accounts without authorization and failing to honor loan extension agreements.

The bureau charged the Chicago-based company with unfair acts and practices, in violation of the Consumer Financial Protection Act.

Find out more details about the company’s illegal actions.

In the agency’s first enforcement action with Kathy Kraninger in the director’s chair, the Consumer Financial Protection Bureau reached a settlement with USAA Federal Savings Bank over its alleged failure to honor consumer requests to stop payment on preauthorized electronic fund transfers and unauthorized reopening of closed deposit accounts.

The bureau cited the company for violations of the Electronic Fund Transfer Act (EFTA) and the Consumer Financial Protection Act’s prohibition against unfair, deceptive or abusive acts or practices.

Find out more details about the consent order.