The incoming Biden Administration must “urgently” act to reverse the Consumer Financial Protection Bureau’s payday lending and debt collection rules, the government watchdog group, Accountable.US said last week. “Over the course of the past four years, the Trump administration has enacted corrupt and harmful policies across environmental, immigration, economic, and many other issues for special interests, many with close ties to the Trump administration, that will negatively impact generations of Americans,” the group said, in announcing the first five rules it wants the administration to overhaul. “To help reverse the damage done, we’re tracking key policies that the next administration
Consumer Financial Protection Bureau officials say they are suspending a reorganization plan that had been blasted by Sen. Sherrod Brown and 83 consumer groups as weakening the agency. It is expected that Biden will replace the current director with one more interested in a strict regulatory approach.
It appears that the new payday loan regulation will be scrapped in the next administration, but the CFPB is continuing the rulemaking process anyway.
Credit union lobbyists and consumer advocates expect Biden to remove Kraninger and return the CFPB to its rules made under the Obama administration. Here is a long list of what may change back to the way it was.
The Consumer Financial Protection Bureau issued a 653-page debt collection rule that does not apply to first-party debt collectors like credit unions. However, it will apply if a credit union hires a professional debt collector.
The National Association for Latino Community Asset Builders filed suit in U.S. District Court against the Consumer Financial Protection Bureau, demanding that the original payday lending rule be restored. The lawsuit specifically targets the no-underwriting lending portion of the rule, saying that it helps lenders, not consumers, contrary to the consumer protection mission assigned to the CFPB.
Disagreement over the Consumer Financial Protection Bureau’s payday lending rule is in federal court, with the CFPB arguing that just because its original structure was found unconstitutional, its rules are still valid.
With the election just weeks away, Kraninger has announced a significant reorganization of the Consumer Financial Protection Bureau. Sen. Brown charges the result of the reorganization will be to weaken the Bureau’s ability to protect consumers.
The Consumer Financial Services Association of America and a Texas trade group are arguing before a Texas federal judge that the Consumer Financial Protection Bureau’s payday loan rule should be invalidated because the Supreme Court declared the original structure of the CFPB unconstitutional.
Update on the federal court battle between the CFPB and consumer groups about whether the CFPB Taskforce on Federal Consumer Financial Law is legal.