The House Appropriations Committee has approved by a vote of 30-17 the FY17 Financial Services and General Government Appropriations bill. The Committee also adopted a bipartisan amendment to the bill that would block the CFPB from finalizing or enforcing a rule regulating payday lending until the CFPB submits a detailed report on the consumer impact to Congress and identifies existing credit products available to replace the current sources of short-term, small dollar credit. The amendment, which was sponsored by Republican Congressman Steven Palazzo and Democratic Congressman Henry Cuellar, was adopted by the Committee in a 30-18 vote.
On June 2, 2016, the CFPB issued a proposed rule covering payday and auto title loans, deposit advance products, and certain high-rate installment and open-end loans. On June 15, 2016, from 12 p.m. to 1 p.m. ET, we will hold a webinar on the proposal: The CFPB’s Proposed Payday/Auto Title/High-Rate Installment Loan Rule: Can Industry Adapt to the New World Order? Information about the webinar and a link to register are available here.
The FY 2017 appropriations bill already included several provisions intended to curb the CFPB’s authority, including a provision that would block the CFPB from enforcing a rule regulating pre-dispute arbitration agreements until it has submitted to Congress a study that meets criteria specified in the bill. On May 5, 2016, the CFPB issued a proposed rule that would prohibit covered providers of certain consumer financial products and services from using an agreement with a consumer that provides for arbitration of any future dispute between the parties to bar the consumer from filing or participating in a class action with respect to the covered consumer financial product or service. The proposed rule would also require a covered provider that is involved in an individual arbitration pursuant to a pre-dispute arbitration agreement to submit specified arbitral records to the CFPB.