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CFPB Issues Small Entity Compliance Guide for Payday Loan Rule Payment Provisions

The CFPB has issued a new small entity compliance guide: “Payday, Vehicle Title and High-Cost Installment Lending Rule: Payment-Related Provisions.”

The CFPB has proposed to revise its final payday/auto title/high-rate installment loan rule to rescind the rule’s ability-to-repay (ATR) provisions in their entirety and to delay the compliance date for the ATR provisions until November 19, 2020.  However, its proposals would leave unchanged the rule’s payment provisions and continue to require compliance by August 19 with those provisions.

The compliance guide states that because the proposed rulemaking does not reconsider the rule’s payment-related requirements, the guide “highlights information that may be helpful when implementing [such payment-related requirements.]”  It further states that the guide does not discuss the rule’s ATR provisions and that “as appropriate,” the Bureau will revise the guide to assist industry with implementation of the ATR provisions “at a later date.”

The guide is essentially a plain language summary of the rule.  It does not address any of the troublesome issues raised by the payment provisions that we have identified.  (Several footnotes indicate that the CFPB intends to make technical corrections to the rule, but only apparently to fix clerical errors.)

The issuance of the guide is required by the Small Business Regulatory Enforcement Act.  Like previously-released CFPB small entity compliance guides, the new guide cautions that it is not a substitute for reviewing the underlying rule.

Copyright © by Ballard Spahr LLP

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About this Author

Jeremy T Rosenblum, consumer financial services group, finance partner, Philadelphia, Pennsylvania, Ballard Spahr, UDAAP, TILA
Partner

Jeremy T. Rosenblum is Co-Practice Leader of the firm's Consumer Financial Services Group. He has devoted the past 30 years in private practice to representing the consumer financial services industry.

Mr. Rosenblum's practice focuses on federal and state lending and consumer practices laws, with emphasis on the interplay between federal and state laws, joint ventures between banks and nonbank financial services providers, the development and documentation of new financial services products (especially products designed to serve the needs of...

215-864-8505
Jason Cover, Ballard Spahr Law Firm, Philadelphia, Finance Law Attorney
Associate

Jason M. Cover is an associate in the Business and Finance Department and a member of the Consumer Financial Services Group. As part of his practice, he provides counsel with respect to regulatory and transactional issues arising from state and federal consumer finance laws, including, among others, the Truth in Lending Act (TILA), Equal Credit Opportunity Act (ECOA), Servicemembers Civil Relief Act (SCRA), Fair Credit Reporting Act (FCRA), Fair Debt Collection Practices Act (FDCPA), Electronic Fund Transfer Act (EFTA), Electronic Signatures in Global and National Commerce Act (ESIGN), Telephone Consumer Protection Act (TCPA), and UDAAP/UDAP statutes prohibiting unfair, deceptive, and abusive acts and practices.

Prior to joining Ballard Spahr, he served as in-house counsel to a leading consumer financial services company where he advised on an array of regulatory, legal, and compliance issues. Mr. Cover also worked as an associate for the New York office of Jones Day where he advised on a variety of complex legal issues.

215-864-8426