Payday Lending

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On March 26, the CFPB held a public hearing on payday and auto title lending, the same day that it released proposed regulations for short-term small-dollar loans. Virginia Attorney General, Mark Herring gave opening remarks, during which he asserted that Virginia is perceived as the “predatory lending capital of the East Coast,” suggesting that payday and auto title lenders were a large part of the problem.… Continue Reading

On March 26th, the Community Financial Services Association (“CFSA”) held a press call to address the CFPB’s rulemaking process for developing payday loan regulations.  CFSA Chief Executive Officer Dennis Shaul offered brief opening remarks before answering questions from the press immediately prior to a CFPB field hearing on payday loans being held in Richmond, VA.… Continue Reading

The CFPB has moved a step closer to issuing payday loan rules by releasing a press release, factsheet and outline of the proposals it is considering in preparation for convening a small business review panel required by the Small Business Regulatory Enforcement Fairness Act and Dodd-Frank.  The CFPB’s proposals are sweeping in terms of the products they cover and the limitations they impose. … Continue Reading

We recently wrote about three studies that cast serious doubt on the benefit to payday loan borrowers of an ability-to-repay requirement, a payment-to-income (PTI) ratio ceiling, and rollover limits, three potential payday loan restrictions thought to be under consideration by the CFPB.

The findings of these studies find support in another study released this week by Navigant Economics entitled “Small-Dollar Installment Loans: An Empirical Analysis.”   … Continue Reading

The CFPB has announced that it will hold a field hearing on payday lending on
March 26, 2015 in Richmond, Virginia.  Like other CFPB field hearings, the event will feature remarks from Director Richard Cordray, as well as testimony from consumer groups, industry representatives, and members of the public.

At his appearance last week before the House Financial Services Committee, Director Cordray indicated the CFPB would soon be convening a small business panel to provide input on the payday and small dollar loan rules under consideration. … Continue Reading

On Tuesday, March 3, CFPB Director Richard Cordray appeared before the House Financial Services Committee to answer questions regarding the Bureau’s Semi-Annual Report to Congress and the President, which it published on December 4 of last year.  As we anticipated shortly before Director Cordray’s testimony, the report merely provided a backdrop for the hearing, which, in reality, served as a forum for committee members to question the Director on a range of issues significant to their respective constituents. … Continue Reading

The leaders of four liberal and minority Congressional caucuses have written to Director Cordray to urge the CFPB to adopt “strong protections” for payday loans.  The letter was signed by the co-chairs of the Congressional Progressive Caucus and the chairs of the Congressional Hispanic Caucus, Congressional Black Caucus, and Congressional Asian Pacific American Caucus.… Continue Reading

We recently wrote about two studies, one by Professor Ronald Mann and the other by Professor Jennifer Lewis Priestley, that cast serious doubt on the benefit to payday loan borrowers of an ability-to-repay requirement and limits on rollovers for payday loans, two elements that the CFPB is expected to include in its payday loan proposal.… Continue Reading

Isaac Boltansky of Compass Point has issued an estimated timeline for the CFPB’s payday loan rulemaking that includes a July 2015 expected date for the CFPB’s release of a proposed rule.

Mr. Boltansky estimates that the CFPB will  initiate a small business panel pursuant to the Small Business Regulatory Enforcement Fairness Act (SBREFA) this month, conclude the SBREFA process in April 2015, and issue its proposal in July 2015. … Continue Reading

The CFPB’s payday loan rulemaking was the subject of a NY Times article this past Sunday which has received considerable attention. According to the article, the CFPB will “soon release” its proposal which is expected to include an ability-to-repay requirement and limits on rollovers.

Two recent studies cast serious doubt on the rationale typically offered by consumer advocates for an ability-to-repay requirement and rollover limits—namely, that sustained use of payday loans adversely affects borrowers and borrowers are harmed when they fail to repay a payday loan.… Continue Reading