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CFPB Deputy Director Zixta Martinez recently provided the opening remarks at the CFPB’s Academic Research Council meeting.  In her remarks, Martinez emphasized the CFPB’s role as a data-driven agency and welcomed further discussion of state payday extended payment plans and of the inclusion of medical debt in credit reports—two topics that have garnered renewed public interest due to the COVID-19 pandemic.… Continue Reading

The Texas federal district court hearing the lawsuit filed by two trade groups challenging the CFPB’s 2017 final payday/auto title/high-rate installment loan rule (2017 Rule) has entered an order directing the parties to files briefs regarding a compliance date for the 2017 Rule’s payment provisions.  The order states that the court requests the 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

We discuss the practices found to be unlawful by CFPB examiners in the areas of deposits, auto servicing, and payday lending, identify practical takeaways for avoiding criticism by the “new CFPB,” and share our thoughts on what the findings signal for future scrutiny in these areas by the “new CFPB.”

Ballard Spahr Senior Counsel Alan Kaplinsky hosts the conversation, joined by Chris Willis, Co-Chair of the firm’s Consumer Financial Services Group, and Jason Cover, a partner in the Group.… Continue Reading

In an opinion authored by Chief Justice Roberts (the “DACA Opinion”), the Supreme Court has concluded that the rescission of the DACA program by the U.S. Department of Homeland Security (DHS) was arbitrary and capricious and hence in violation of the Administrative Procedure Act (APA). Several clients have asked whether the decision bodes ill for the CFPB’s anticipated rescission of the mandatory underwriting (that is, ability to repay) provisions of its payday lending rule.… Continue Reading

On April 30, 2019, the House Financial Services Subcommittee held a hearing entitled “Ending the Debt Traps in the Payday and Small Dollar Credit Industry.” (A video of the hearing is available here.)

The tone and tenor of the hearing became readily apparently during opening remarks offered by Representative Gregory Meeks, in which he analogized small dollar lenders to “no document” mortgage lenders that caused the 2008 financial crisis because of a failure to assess ability to repay.… Continue Reading

The CFPB has issued highly-anticipated proposed revisions to its final payday/auto title/high-rate installment loan rule (Rule) that would rescind the Rule’s ability-to-repay provisions in their entirety (which the CFPB refers to as the “Mandatory Underwriting Provisions”).  The Bureau will take comments on the proposal for 90 days after its publication in the Federal Register. … Continue Reading

Addressing the Mortgage Bankers Association (MBA) 2018 Annual Convention in Washington, DC on October 15, 2018, BCFP Acting Director Mick Mulvaney advised that regulation by enforcement is dead, and that he does not care much for regulation by guidance either. He noted to the members that they have a right to know what the law is.… Continue Reading

On September 19, 2018, the Georgia based Cooperative Baptist Fellowship (the “Fellowship”) filed a motion to intervene as a defendant in a case filed by the Community Financial Services Association of America Ltd. and the Consumer Service Alliance of Texas challenging the CFPB’s Payday Rule. The lawsuit was filed in April 2018 claiming, among other things, that the CFPB did not follow proper procedure in issuing the Payday Rule; that the CFPB improperly deemed certain lending practices unfair and abusive; that the CFPB’s authority to address unfair and abusive practices is unconstitutional; and that the CFPB’s structure is unconstitutional.… Continue Reading

We have previously blogged about the industry challenge to the CFPB’s rule on payday/vehicle title/high rate installment loans.  The Plaintiffs’ have now filed an Unopposed Motion for Reconsideration and have advised that the CFPB intends to file a separate supporting memorandum.  In their Motion for Reconsideration, the Plaintiffs’ argue that a combined stay of litigation (previously approved by the Court) and stay of the Rules’ compliance dates (previously denied by the Court) –

would relieve the parties and the Court of the burdens of litigation that might not be needed, while at the same time protecting Plaintiffs’ members from having to comply with, and prepare for compliance with, an allegedly invalid rule….… 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