CFPB issues small entity compliance guide for payday loan rule payment provisions

Ballard Spahr LLP

The CFPB has issued a new small entity compliance guide: “Payday, Vehicle Title and High-Cost Installment Lending Rule: Payment-Related Provisions.”

The CFPB has proposed to revise its final payday/auto title/high-rate installment loan rule to rescind the rule’s ability-to-repay (ATR) provisions in their entirety and to delay the compliance date for the ATR provisions until November 19, 2020.  However, its proposals would leave unchanged the rule’s payment provisions and continue to require compliance by August 19 with those provisions.

The compliance guide states that because the proposed rulemaking does not reconsider the rule’s payment-related requirements, the guide “highlights information that may be helpful when implementing [such payment-related requirements.]”  It further states that the guide does not discuss the rule’s ATR provisions and that “as appropriate,” the Bureau will revise the guide to assist industry with implementation of the ATR provisions “at a later date.”

The guide is essentially a plain language summary of the rule.  It does not address any of the troublesome issues raised by the payment provisions that we have identified.  (Several footnotes indicate that the CFPB intends to make technical corrections to the rule, but only apparently to fix clerical errors.)

The issuance of the guide is required by the Small Business Regulatory Enforcement Act.  Like previously-released CFPB small entity compliance guides, the new guide cautions that it is not a substitute for reviewing the underlying rule.

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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