Bipartisan group of lawmakers introduce CRA resolution to override CFPB payday loan rule
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.
The CFPB’s final payday loan rule was published in the Federal Register on November 17. The regulation is effective January 16, 2018. The compliance date for the rule’s substantive requirements and limits (Sections 1041.2 through 1041.10), compliance program/documentation requirements (Section 1041.12), and prohibition against evasion (Section 1041.13) is August 19, 2019. The deadline to submit an application for preliminary approval to be a registered information system is April 16, 2018.
To be eligible for the special Senate procedure that allows a CRA disapproval resolution to be passed with only a simple majority, the Senate must act on the resolution during a period of 60 “session days” which begins on the later of the date when the rule is received by Congress and the date it is published in the Federal Register. For purposes of the CRA, a rule is considered to have been “received by Congress” on the later of the date it is received in the Office of the Speaker of the House and the date of its referral to the appropriate Senate committee. The payday loan rule was received by the Speaker of the House on November 13 and referred to the Senate Banking Committee on November 15. (Due to uncertainty as to which days going forward will count as “session days,” the deadline for voting on a CRA resolution cannot be definitively determined in advance.)
In addition to the CRA resolution, we expect an industry lawsuit challenging the rule to be filed within the next few weeks. According to media reports, the lawsuit is expected to be filed by the Community Financial Services Association of America. Also, Mick Mulvaney, President Trump’s designee as CFPB Acting Director, is reported to be reviewing the payday loan rule as well as other CFPB actions to determine what his next steps will be.