Texas Court Continues Stay of Small-Dollar Rule’s Compliance Date
Earlier this week, Judge Lee Yeakel from the District Court for the Western District of Texas continued his “stay” of the compliance date for both the payment provisions and the mandatory underwriting provisions of the Small-Dollar Rule (“the Rule”).
Judge Yeakel also ordered both parties to provide a status report update by December 6, 2019. At that time, the Judge Yeakel will decide again whether to continue or lift the stay.
The CFPB’s Rule has two important components:
- Payment Provisions: These were scheduled to go into effect on August 19, 2019, but the court-ordered stay has postponed their compliance date. The Consumer Financial Protection Bureau (CFPB) has not officially proposed amending the payment provisions so far, although many expect the CFPB to eventually exempt debit card payments from the payment provisions.
- Mandatory Underwriting Provisions: The CFPB has proposed rescinding these provisions altogether but have not officially done so at this time. For now, the CFPB has only extended the compliance date for the mandatory underwriting provisions until November 2020.
Last month, the CFPB issued a small-dollar rule compliance guide for small financial institutions that highlights information that may be helpful when implementing the payment provisions of the Rule. For more information, please click here.