Last month, Ballard Spahr submitted two letters to the CFPB, critiquing the payment provisions of the CFPB’s final payday/auto title/high-rate installment loan rule (the “Payment Provisions”).  Last Friday, the Bureau delayed the implementation date of the rule’s mandatory underwriting provisions by 15 months, to November 19, 2020.  However, the Payment Provisions are scheduled to go into effect on August 19, 2019 or the date the current judicial stay of the rule is lifted, whichever comes later.

One Ballard Spahr letter focused on the unwarranted treatment of card payments under the Payment Provisions.  Our other letter argues that the Payment Provisions are deeply flawed.  It asserts that, in large part, the Payment Provisions are not justified by the UDAAP concerns identified by the Bureau as their source.  The Payment Provisions impose substantial unwarranted burdens on the industry and straightjacket covered lenders from taking actions beneficial to their customers.  And, despite their complexity and detail, the Payment Provisions fail to provide clear guidance on fundamental issues.

For these and other reasons, clarification of the Payment Provisions and further rule-making are warranted.