The Consumer Financial Protection Bureau may reinstitute the agency’s rule that would require payday loan borrowers to demonstrate their ability to repay a loan before it is approved.
The Credit Union National Association and the National Association of Federally-Insured Credit Unions have been letting the Biden administration and legislators know the actions they believe will help credit unions help their members during the pandemic. These lists are extensive, but may be tough to achieve with an administration focused on tightening up financial regulations.
At the January National Credit Union Administration board meeting, board member Todd Harper frequently found himself in the minority. Among other items, the board considered a proposed rule to change the definition of Complex Credit Union, a proposed rule that would expand permitted activities of Credit Union Service Organizations, and an advance notice of proposed rulemaking to make changes to the NCUA Risk-Based Capital.
A controversial Consumer Financial Protection Bureau task force on consumer financial law released its final report the day before a hearing about its makeup was to be held in a federal court in Massachusetts. Credit unions will like its recommendation that all credit unions be allowed to serve underserved areas. Consumer groups will object to many of the other recommendations and it is unlikely the Biden Administration will accept them.
House Financial Services Chairman Maxine Waters wrote a 45-page letter to President-elect Joe Biden listing all the regulatory decisions that were made in the last four years in the agencies under her committee’s jurisdiction that she thinks should be reversed when he gets into office. She also wants Consumer Financial Protection Bureau Director Kathleen Kraninger fired.
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
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.
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.