Small-Dollar Rule Compliance Guide
The payment provisions of the Consumer Financial Protection Bureaus’ (CFPB) small-dollar rule (the Rule), also known as the payday rule, is set to go into effect on August 19, 2019. Last month, the CFPB updated its Small Entity Compliance Guide that highlights information that may be helpful when implementing the payment provisions of the Rule.
The Guide covers the payment provisions of the Rule in detail, including the definition of a covered loan, disclosure notices for first or unusual payment withdraws, and record retention.
Earlier this year, the CFPB extended the compliance date for the underwriting standards, also known as the ability-to-repay standards, of the Rule until November 2020. However, the CFPB has not issued a notice of proposed rulemaking (NPRM) or given any indication on whether they will extend the compliance date for the payment provisions.
Many experts and DC-insiders believe that either (1) the courts will continue their stay all provisions of the small-dollar rule or (2) the CFPB will propose extending the compliance date of the payment provisions. Nonetheless, there is still a very real possibility that the courts and the CFPB do nothing, allowing the payment provisions of the rule go into effect on August 19.