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Final rule on small dollar lending issued
The CFPB has issued a final rule amending its Payday, Vehicle Title, and Certain High-Cost Installment Loans regulations at 12 CFR part 1041. The final rule, which will be effective 90 days after its Federal Register publication, rescinds the mandatory underwriting provisions of the 2017 rule but does not rescind or alter the payments provisions of the 2017 rule.
The Bureau had received a petition to commence a rulemaking to exclude debit and prepaid cards from the payments provisions of the small dollar lending rule, and the agency has denied that petition. The Bureau has also issued guidance clarifying the payments provisions’ scope and assisting lenders in complying with those provisions. In addition, today the Bureau released a ratification of the payment provisions in light of the Supreme Court’s recent decision in Seila Law. Although the payments provisions are currently stayed by court order, the Bureau will seek to have them go into effect with a reasonable period for entities to come into compliance.
- Press release
- Executive summary
- Updated small entity compliance guide (now a Compliance Aid)
- Payday Lending Rule FAQs (a Compliance Aid) on covered loans and payment transfers
PUBLICATION UPDATE: Published 7/22/2020 with effective date of 10/20/2020.