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 must urgently seek to overturn.”
Two of the five rules the group said should be immediately tackled were issued by the CFPB.
The group blasted the Trump Administration’s decision to abandon an Obama Administration rule that required that borrowers demonstrate they have an ability to repay a payday loan before the funds are disbursed. The Obama-era rule strictly regulated the payday loan industry, while the Trump Administration loosened the rules.
The Obama rule’s “mandatory underwriting provisions were widely supported as they prevented predatory lenders from trapping consumers in debt,” the group said.
Accountable.US also called on the incoming administration to abandon the Trump Administration’s rule governing third-party debt collections. That rule “allows debt collectors to send an unlimited number of texts and email to consumers, while setting a limit of seven telephone calls per week per debt.”
When the President-elect Joe Biden takes office, the administration should begin working on a new debt collection rule that would mandate strict prohibitions on excessive electronic communications.