A group of 27 Democratic Senators joined by Independent Senator Bernie Sanders have sent a letter to Director Cordray urging the CFPB to “strengthen” its proposed payday loan rule.

The Senators take aim at the proposal’s exemptions from an ability to repay (ATR) analysis for both short-term and longer-term credit.  The proposal’s ATR exemption can only be used if it would not result in the consumer having more than six covered short-term loans during a consecutive 12-month period or being in debt for more than 90 days on covered short-term loans during a consecutive 12-month period.  The Senators want the CFPB “to reconsider the six loan exemption and implement strong ability to pay requirements.”  For longer-term credit, they want the CFPB “to strengthen the analysis that lenders must undertake to ensure that borrowers have enough money to pay all basic living expenses.”

The Senators also express concern with the proposal’s 30-day “cooling off” or waiting period for short-term credit.  In particular, the Senators question the CFPB’s rationale for not using a 60-day waiting period, which the CFPB had indicated it was considering in the outline of its proposals used by the SBREFA panel.  The Senators state that “[b]y reducing the cooling off period, the CFPB’s protection against repeated borrowing is substantially weakened.”  They urge the CFPB “to ensure that a cooling off period is long enough that borrowers can manage their expenses and are not reborrowing to service prior short-term loans.”