CFPB Plans to Issue Final Payday Lending Rule; Target Date Has Slipped

The Consumer Financial Protection Bureau said this week it still intends to repeal most of the Obama-era strict rule governing payday loans, although the date appears to have slipped.

In its section of the “Spring 2020 Unified Agenda of Federal Regulatory and Deregulatory Actions,” the CFPB said the final rule would be issued in April, 2020. It has not yet been released.

The CFPB still said the rule no longer will require payday lenders to determine whether a borrower is likely to be able to repay a loan before that loan is approved. Former CFPB Director Richard Cordray issued a strict rule attempting to rein in payday lenders that charge large fees and use huge interest rates when making loans. Critics have said that those practices can lock a borrower into a cycle of debt.

The Trump Administration has made it clear that it opposes that rule and intends to rewrite it.

The bureau also said that in October, the CFPB will issue a final rule governing third-party debt collectors. While credit unions do not qualify as third-party collectors, they often hire such companies. When the agency first proposed its rule in May 2019, critics said that it would allow debt collectors to swamp people with collection notifications. The debt collection industry, on the other hand, said it was too strict.

In the agenda, the CFPB said that it no longer intends to make changes to the 2009 rule governing overdrafts. “The overdraft rule is not complex, and no aspect of the rule was identified as presenting a unique burden or cost to small entities,” the agency said.

Related:

CFPB: Spring 2020 Rulemaking Agenda

Interest Rate Change, Subordinated Debt on NCUA Spring Regulatory Agenda

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