CFPB Issues Final Rule Canceling Payday Loan Rule’s Ability to Pay Off Provisions and Ratifies Payments Rule Provisions | Ballard Spahr srl


The CFPB has published its highly anticipated final rule repeal the repayment capacity provisions in its payday loan rule / automatic title / high rate installment loan (payday rule). The final rule will come into force 90 days after its publication in the Federal Register.

The CFPB also issued a document in which it confirmed and ratified the payment provisions of the Payday Rule. The document states that the ratification dates back to November 17, 2017, when the payday rule was published in the Federal Register. The ratification aims to preserve the validity of the payments provisions in response to the United States Supreme Court ruling last week in Seila Law who held that the Dodd-Frank provision that only allows the president to remove the CFPB director “for cause” violates the separation of powers in the US Constitution.

The date for bringing the payment provisions into compliance has been suspended pursuant to an order issued by the Texas Federal District Court hearing the lawsuit against the CFPB challenging the payday rule. The Bureau declares in his press release that he “will seek to have [the payments provisions] will enter into force with a reasonable period of time for entities to come into compliance. (The CFPB also issued a separate document today, in which it purported to ratify most of the regulatory actions taken by the Bureau from January 4, 2012 to June 30, 2020. We will discuss this ratification in a separate blog post.)

In its press release, the CFPB announced that it had rejected the request it had received to initiate regulations to exclude debit and prepaid cards from the payments provisions. We are disappointed that the Bureau has decided not to address this issue as well as the other serious shortcomings in the payments provisions that we have highlighted in previous blogs and in letters to CFPB.

The Bureau also announced that it has issued guidelines to clarify the scope of the payment provisions and help lenders comply with the provisions. In addition, she announced that she plans to conduct research on the development of potential disclosures to help consumers better understand certain features of payday loans.

There could be information about an effort to override the final rule under the Congressional Review Act and the Office is likely to face a lawsuit challenging the final rule under the Congress Act. administrative process,

We are currently reviewing the final rule and tips and will share our thoughts in future blogs.

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