As discussed in an earlier post, on November 6, 2018, Colorado’s voters passed Proposition 111, seeking to limit interest rates and fees charged on payday loans in Colorado to an annualized percentage rate of thirty-six percent. Effective February 1, 2019, the proposition amends Colorado’s Deferred Deposit Loan Act (C.R.S. § 5-3.1-101., et seq.),
Payday Lending
CFPB enters into settlement with off-shore lenders
By Alan S. Kaplinsky on
The CFPB has entered into a proposed settlement with a group of corporate and individual defendants who were alleged to have engaged in unlawful conduct in connection with offering “short-term loans to consumers located in the United States through a network of affiliated companies located in Canada and Malta.”
The settlement is intended to resolve…
State AGs submit comments to FDIC on small-dollar lending
By Alan S. Kaplinsky on
A group of 13 state attorneys general and the District of Columbia AG have sent a letter to the FDIC commenting on the agency’s request for information on small-dollar lending. The RFI, published in November 2018, seeks input on “steps the FDIC could take to encourage FDIC-supervised institutions to offer responsible, prudently underwritten small-dollar…
Minnesota federal court decision is warning to lead generators
By Ronald K. Vaske on
A Minnesota federal district court recently ruled that lead generators for a payday lender could be liable for punitive damages in a class action filed on behalf of all Minnesota residents who used the lender’s website to obtain a payday loan during a specified time period. An important takeaway from the decision is that a…
FDIC hires counsel to investigate now defunct Operation Choke Point
By Theodore R. Flo on
On November 15, 2018, in response to a November 7, 2018 letter from Republican Senators, FDIC Chairman Jelena McWilliams announced that the FDIC has engaged outside counsel to investigate the Obama-era Operation Choke Point, under which the FDIC and other government agencies pressured banks not to do business with payday lenders. In her letter,…
Republican Senators seek action from FDIC to ensure end of Operation Choke Point
By Barbara S. Mishkin on
Thirteen Republican Senators have sent a letter to FDIC Chairman Jelena McWilliams urging the FDIC to take action to ensure that lawful businesses are no longer at risk of adverse financial consequences as a result of “Operation Choke Point, and its associated culture and Choke Point-like regulatory actions.”
“Operation Choke Point” was a federal enforcement…
This week’s podcast: update on the CFPB’s small dollar lending rule
By Barbara S. Mishkin on
Posted in CFPB Rulemaking, Payday Lending
With the August 19, 2019 compliance date for the CFPB’s small dollar lending rule drawing nearer, industry anxiety is growing as to the CFPB’s plans for delaying the compliance date and what changes will be proposed. In this episode, we review what the rule’s ability to pay and repayment provisions would require and why those…
Colorado passes 36% payday loan rate cap
By Alan S. Kaplinsky on
Posted in Payday Lending, State CFS Monitor
By an overwhelming vote (approximately 1,4270,000 million to 433,000), Colorado voters passed Proposition 111, a ballot initiative that places a 36 percent APR cap on payday loans. The question presented to voters was:
Shall there be an amendment to the Colorado Revised Statutes concerning limitations on payday lenders, and, in connection therewith, reducing allowable charges…
Court stays CFPB payday loan rule compliance date
By Jeremy T. Rosenblum on
Yesterday, the court reversed course in the lawsuit filed by two industry trade groups challenging the CFPB’s final payday/auto title/high-rate installment loan rule (Payday Rule). On its own initiative, the Texas federal district court granted a stay of the Payday Rule’s August 19, 2019 compliance date and continued in force its stay of the lawsuit. …
CFPB issues statement regarding plans to reconsider payday loan rule
By Jeremy T. Rosenblum on
Earlier today, the Bureau of Consumer Financial Protection released a Public Statement Regarding Payday Rule Reconsideration and Delay of Compliance Date. Echoing rumors that have been circulating in the industry for several weeks (which we had agreed not to address in our blog), the Statement reads in full as follows:
The Bureau expects to…