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.
If Joe Biden wins the election, he can be expected to replace the CFPB Director quickly and that new director is likely to restore the strict payday lending rule that was adopted during the Obama Administration, according to CUNA Chief Advocacy Officer Ryan Donovan. Donovan gave credit unions a heads up on what may happen next year.
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.
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.
The Consumer Financial Protection Bureau may have rescinded large parts of its payday lending rule, but the parts that remain are “unnecessary, arbitrary, capricious, overreaching, procedurally improper, and substantially harmful to lenders and borrowers alike,” associations representing payday lenders said last week, in an amended suit challenging the rule.
The Consumer Financial Services Association of America and its Texas affiliate had challenged the strict payday lending rule issued during the Obama Administration in the U.S. District Court for the Western District of Texas in 2018.
Certain loans modeled after the National Credit Union Administration’s Payday Alternative Loan program are exempt from the Consumer Financial Protection Bureau’s new payday loan rule, while others may not be, the CFPB said in a series of questions and answers about the new rule on Tuesday.
The agency reiterated that division, as it attempted to answer questions about the new rule.
It seems that a lot of people are unhappy with the revised payday lending rule the Consumer Financial Protection Board issued Tuesday.
Credit union trade groups said the rule should have done more to exempt credit unions.
Consumer groups, on the other hand, said the rule eliminates virtually all consumer protections.
As widely expected, the Consumer Financial Protection Bureau on Tuesday rescinded its rule that requires that payday lenders verify that a borrower is likely to be able to repay the loan before it is approved.
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.