As widely expected, the Consumer Financial Protection Bureau on Tuesday rescinded its rule that requires that payday lenders verify that a borrower is likely to be able to repay the loan before it is approved.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.
The U.S Supreme Court on Monday declared the single-director structure of the Consumer Financial Protection Bureau unconstitutional.
The agency’s configuration is “incompatible with the structure of the Constitution, which—with the sole exception of the Presidency—scrupulously avoids concentrating power in the hands of any single individual,” the court said.
Amid the pandemic crisis, credit unions and banks should offer members and customers safe short-term, small-dollar loans that would mitigate the need for borrowers to re-borrow to repay loans, federal banking regulators, including the National Credit Union Administration, said Wednesday.
“Federally supervised financial institutions are well-suited to meet the credit needs of customers affected by the current COVID-19 emergency,” the NCUA, Federal Deposit Insurance Corporation (FDIC), the Federal Reserve Board and the Office of the Comptroller of the Currency said in a joint statement.
Democratic senators on Monday demanded that CFPB Director Kathy Kraninger abandon efforts to overhaul the agency’s controversial payday lending rule, contending that political appointees exerted improper influence in the process.
House Financial Services Chairwoman Maxine Waters (D-Calif.) is firing back at lawmakers who have called for allowing installment and payday lenders to be eligible for Paycheck Protection Loans, contending that such companies engage in predatory lending practices.