CFPB and trade groups file status report in lawsuit challenging CFPB payday loan rule

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A new joint status report was filed this past Friday with the Texas federal district court hearing the lawsuit filed by two trade groups challenging the CFPB’s final payday/auto title/high-rate installment loan rule (Payday Rule).

The report states that the Bureau “is continuing to make progress” on its proposed rulemaking to rescind the Payday Rule’s ability-to-repay (ATR) provisions and references the Bureau’s statement in its Fall 2019 rulemaking agenda that it expected to take final action on the proposal in April 2020.  The report also states that “the parties are not requesting that the Court lift the stay of the litigation or lift the stay of the compliance date at this time.”

The court’s most recent order continuing the stay of the lawsuit and the August 19, 2019 compliance date for both the Payday Rule’s and its payment provisions was entered on December 6, 2019.  That order directed the parties to file another joint status report by April 24, 2020 “informing the court about proceedings related to the Rule and this litigation as the parties deem appropriate.”  We expect the court to soon enter a new order continuing the stays.

The court first entered orders staying the lawsuit and the compliance date in, respectively, June 2018 and November 2018.  Although the Bureau’s final rule delaying the compliance date for the ATR provisions left unchanged the August 19, 2019 compliance date for the Payday Rule’s payment provisions, the court’s November 2018 order stayed the compliance date for both the ATR and the payment provisions.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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