Payday Lending

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The American Banker has reported that last week, Senator Lindsey Graham introduced a joint resolution under the Congressional Review Act (CRA) to override the CFPB’s final payday/auto title/high-rate installment loan rule (Payday Rule).  The CRA is the vehicle used by Congress to overturn the CFPB’s arbitration rule in a party-line vote.… Continue Reading

In a span of three days, the CFPB, under Acting Director Mulvaney, significantly retreated in the payday-lending space and suffered a court defeat in its request for monetary relief with respect to a CashCall installment lending program.  The federal district court’s decision in CashCall followed a bench trial that occurred before Mr.… Continue Reading

On December 1, 2017, three Democrat and three Republican members of the House of Representatives introduced a joint resolution under the Congressional Review Act (H.J. Res. 122) to override the CFPB’s final payday/auto title/high-rate installment loan rule.  The CRA is the vehicle used by Congress to overturn the CFPB’s arbitration rule in a party-line vote.… Continue Reading

The CFPB announced today that it intends to engage in a rulemaking process to reconsider, pursuant to the Administrative Procedure Act, its final rule on Payday, Vehicle Title, and Certain High-Cost Installment Loans (the “Payday Rule”).  The announcement fully accords with our expectation that the Payday Rule will never see the light of day in its current form.… Continue Reading

A former CFPB examiner has written U.S. Attorney General Jeff Sessions claiming that CFPB officials falsified examination reports in connection with a CFPB examination of ACE Cash Express that led to the CFPB extracting $10 million of restitution and penalties from ACE.  At the time the CFPB forced ACE to enter into this consent order, even in the absence of any allegations of fraud on the part of the CFPB, we sharply criticized the CFPB for its treatment of ACE.… Continue Reading

A bipartisan group of lawmakers has introduced a joint resolution under the Congressional Review Act to override the CFPB’s final payday/auto title/high-rate installment loan rule.  House members sponsoring the bill consist of three Democrats and three Republicans.  The CRA is the vehicle used by Congress to overturn the CFPB’s arbitration rule.… Continue Reading

Richard Moseley Sr., the operator of a group of interrelated payday lenders, was convicted by a federal jury on all criminal counts in an indictment filed by the Department of Justice, including violating the Racketeer Influenced and Corrupt Organizations Act (RICO) and the Truth in Lending Act (TILA).  The criminal case is reported to have resulted from a referral to the DOJ by the CFPB.… Continue Reading

The CFPB’s final payday loan rule was published in today’s Federal Register.  Lenders covered by the rule include nonbank entities as well as banks and credit unions.  In addition to payday loans, the rule covers auto title loans, deposit advance products, and certain high-rate installment and open-end loans.  For a summary of the rule, see our legal alert.… Continue Reading

Hours after the CFPB released its final payday/auto title/high-rate installment loan rule on October 5, 2017, the OCC rescinded its guidance on deposit advance products.  That guidance, entitled Supervisory Concerns and Expectations Regarding Deposit Advance Products published in November 2013 (OCC Bulletin 2013-40), and substantially identical guidance issued by the FDIC on the same day, had effectively precluded banks subject to OCC and FDIC supervision from offering deposit advance products. … Continue Reading

It will take a while to digest the CFPB’s nearly 1,700-page release on payday, title and high-rate installment lending but, naturally, I have a number of preliminary observations:

  1. It remains highly uncertain that the Rule will ever go into effect.  Once Director Cordray leaves office, his successor may have very different views on the costs and benefits of these products and may, at a minimum, want to assure himself or herself that there is a strong basis for the Rule. 
… Continue Reading