Wondering if I am interpreting this correctly. Section 1041.3(f) on accommodation loans states they are conditionally exempt from the requirements of this part if you've made 2500 or fewer covered loans and those loans represent less than 10% of your total income in the preceding year/tax year. Is everyone else reading this as none of the Payday Lending Rule requirements need to be met then as long as we are within those parameters? We are well below in both total number and total income, but for some reason I have been having a difficult time reading through this rule so I want to make sure I'm not overlooking something.

I am interested in feedback on this also.

I think the rule is confusing as well, but am reading it the same as you. If you make less than 2500 covered loans and less that 10% of your annual receipts from covered loans, you don't have to comply with any provisions in the rule. I found the small entity compliance guide section 2.5.2 helpful for clarifying this.

I'm also reading it the same way but unfortunately, I'm not so sure I have a foolproof way to track the numbers

Ditto.

I suggested that we write it into loan policy (with no exceptions allowed), that we don't make any non-real-estate-secured loans that have a maturity of 45 days or less, have any payment that “could be” more than twice the amount of any other payment (balloon loans) or have an APR that is greater than 36% AND a “leveraged payment mechanism” which could be auto-draft or offset rights.

That idea got shot down.

Anything new on this??

I'm reading it the same as you all. I am also recommending a policy statement but made it very broad restricting the origination of covered loans and requiring Consumer Lending 1VP approval on any loan originated. I am also recommending a special code be added to the LOS to track these loans so we can monitor volume. We have a less than 20 of these on the books now and they came from an acquired bank.

I hope I am interpreting this correctly and we don't need to comply with the payment provisions for the few loans we have on the books prior to the effective date of this rule.

This rule is so weird that it makes it REALLY confusing to me.

Accommodation loans. It appears you don't actually have a leveraged payment mechanism IF the transfer is from a deposit account at your FI to a loan at same FI AND you don't charge an "NSF" fee if the transfer is against insufficient funds. This fee restriction appears to be required to be covered in the account agreement.

SO, if your APR exceeds 36% BUT you don't go after funds held somewhere else and don't charge if funds are not available that these would not count towards the 2500 or the 10% income limit...if that statement is true...then I may well be able to prove that anything remaining would be less than 2500 actual loans.

So at that point, if you don't make short term, OELOC or balloons, the only thing left is if you have a loan that meets The APR limit AND has a leveraged payment mechanism outside of your own bank, that would be an accommodation loan, and not covered either?

Is that even close to right> I am so close to cross-eyed on this right now...I'm just trying to get my facts straight so I can see just what affect this rule 'may' have on us.

Bump

We, too, originate far fewer than 2500 covered loans and the total income from them is considerably lower than 10%. I have interpreted the rule to mean that because of this (documented) fact, that we do not have to implement any changes to accommodate the rule - neither the payment provisions nor underwriting requirements. Would love to hear more from others though!

John Burnett is holding a webinar on 7/31 on the topic.

That is the way we are interpreting it. We will check loan numbers annually or more often if needed to ensure we will be ready to follow the rule when we have to. In the meantime my fingers are crossed that the CFPB will redefine covered loans.

That's also my interpretation, but even though it may be obvious to us, I think we need to be ready to demonstrate (i.e. prove) that our banks have not exceeded the loan and revenue thresholds. Just my two-cents.