Nevada’s Governor recently approved amendments to Nevada laws that concern the ability of employees of Installment Loan Company licensees to work from remote locations and the collection of medical debt. The amendments become effective on October 1, 2023.
Using data for the last quarter of 2020 and first three quarters of 2021, the study examined the effects of the 36% rate cap imposed by the Illinois Predatory Loan Prevention Act which became effective in March 2021. The study found that the cap significantly decreased the availability of small-dollar credit in Illinois. … Continue Reading
Over the past few years, numerous states have imposed interest rate caps on consumer credit. In recent blog posts, we discussed the efforts of both Michigan and New Mexico to impose a 36% annual interest rate cap. Last year, Congress took up the discussion of a national 36% annual interest rate cap.… Continue Reading
Delivering the keynote address last week at the Consumer Federation of America’s 2022 Consumer Assembly, CFPB Deputy Director Zixta Martinez indicated that the CFPB “is taking a close look” at “‘rent-a-bank’ schemes.”
Deputy Director Martinez commented that “[s]ome lenders attempt to use [relationships with banks] to evade state interest rate caps and licensing laws by making claims that the bank, rather than the non-bank, is the lender.” … Continue Reading
In opposing efforts by federal and state lawmakers to impose rate caps on small-dollar loans, industry representatives have pointed out the harm that a rate cap can create for consumers, particularly those with less than perfect credit, by reducing access to credit. These concerns are often dismissed by consumer advocates with the argument that banks and credit unions will increase their small-dollar lending if other providers leave the market due to interest rate caps.… Continue Reading
The Fifth Circuit has scheduled oral argument for May 11, 2022 in the appeal filed by the trade groups challenging the payment provisions in the CFPB’s 2017 final payday/auto title/high-rate installment loan rule.
The trade groups have appealed from the district court’s final judgment granting the CFPB’s summary judgment motion and staying the compliance date for the payment provisions until 286 days after August 31, 2021 (which would have been until June 13, 2022). … Continue Reading
Hawaii recently enacted significant changes to its small-dollar lending law that repeals existing Hawaii law on deferred deposits and creates a new regime for installment loans. Although H.B. 1192 took effect on July 1, the repeal of the existing law on deferred deposits is effective January 1, 2022 as is the new licensing requirement for “installment lenders.”… Continue Reading
The CFPB and the two trade groups challenging the CFPB’s 2017 final payday/auto title/high-rate installment loan rule (2017 Rule) have filed responses with the Texas federal court regarding a compliance date for the 2017 Rule’s payment provisions.
The responses reply to the briefs filed by the parties following the court’s issuance of an order requesting additional briefing “concerning what would be the appropriate compliance date if the court were to deny Plaintiffs’ motion for summary judgment and grant Defendants’ motion for summary judgment.” … Continue Reading
The CFPB has issued a no-action letter (NAL) to a bank to facilitate the bank’s ability to offer a small-dollar loan product.
In May 2020, the CFPB issued a No-Action Letter Template for small-dollar loan products (Template) offered by insured depository institutions or credit unions subject to the Bureau’s supervisory and enforcement jurisdiction (i.e.,… Continue Reading