CFPB's final payday rule should be ready in spring, agency says
WASHINGTON — The Consumer Financial Protection Bureau plans to issue a final rule in April that would rescind strong underwriting requirements for payday lenders, the agency said this week.
Earlier this year, the CFPB proposed an overhaul of its tough payday lending regulation issued in 2017 under former Director Richard Cordray. The new plan would eliminate a provision forcing lenders to verify borrowers’ repayment ability. The bureau preserved restrictions on lenders making repeated attempts to debit payments from consumer bank accounts.
“The comment period for the [proposal] closed in May 2019 and the Bureau is carefully reviewing the approximately 190,000 comments it received,” the agency said in its fall rulemaking agenda. “The Bureau expects to take final action in April 2020 with respect to this proposal.”
Meanwhile, a lawsuit pending in Texas is seeking to get the original payday lending regulation thrown out. The judge in that case has delayed the compliance date for the 2017 rule to November 2020.
The CFPB agenda also includes plans to issue a proposal this year revising the agency’s remittance rule. The plan would address the July 2020 sunset of a “temporary exception that allows institutions to estimate fees and exchange rates in some circumstances,” the bureau said.
The agency also added two new rulemaking initiatives to its long-term regulatory agenda — regarding loan originator compensation and the use of electronic communication in credit card servicing and origination — both stemming from a comprehensive 2018 review of the CFPB’s operations.