Judge Delays Small-dollar Rule’s Compliance Date
A federal judge delayed the compliance date of the Consumer Financial Protection Bureau’s (CFPB) rule for “Payday, Vehicle Title, and Certain High-Cost Installment Loans,” commonly referred to as the Small Dollar or Payday Rule. The compliance date was originally set for August 19, 2019.
The judge has refused to stay the small-dollar rule twice before, but changed his mind when the CFPB announced that it would revise certain parts of the rule in an October 26 press release. “Upon reconsideration, and given the information in the October 26 joint report, the court concludes that to prevent irreparable injury a stay of the rule’s current compliance date of August 19, 2019, is appropriate,” said the judge.
The CFPB had written in its October 26th press release that it was “currently planning to propose revisiting only the ability-to-repay provisions and not the payments provisions, in significant part because the ability-to-repay provisions have much greater consequences for both consumers and industry than the payment provisions.”
Dennis Shaul, CEO of the Community Financial Services, a plaintiff in the case, called the stay “the logical and reasonable approach to avoid forcing companies to endure the cost of complying with a rule that may never take effect.”
Despite the rule having limited effect on installment lenders in general, the CFPB continued its attack on tribal sovereignty through expressions of its legal authority and dismissal of concerns during the tribal consultation process.