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Parties File Another Status Report in Trade Group Lawsuit Challenging CFPB Payday Loan Rule

The CFPB (Consumer Financial Protection Bureau) and the two industry trade groups that filed a lawsuit in a Texas federal district court challenging the CFPB’s final payday/auto title/high-rate installment loan rule (Payday Rule) filed a new status report with the court on August 2.

The status report references the CFPB’s proposal to revise the Payday Rule to rescind the rule’s ability-to-repay (ATR) provisions in their entirety and its final rule delaying the compliance date for the ATR provisions until November 19, 2020.  The reports states that “the Bureau is continuing to make progress” on its proposal to rescind the ATR provisions.  It also states that the parties “are not requesting that the Court lift the stay of the litigation or lift the stay of the compliance date at this time.”  (Although the Bureau’s final rule delaying the compliance date for the ATR provisions left unchanged the August 19 compliance date for the Payday Rule’s payment provisions, the stay of the compliance date entered by the court on November 6, 2018 stayed the compliance date for both the ATR and the payment provisions.)

On May 30, 2019, following the filing of a status report on May 17, the court entered an order continuing the stay of the lawsuit and the August 19 compliance date for both the ATR and the payment provisions.  The order directed the parties to file another joint status report by August 2.

Since none of the parties are requesting that either stay be lifted, it is unlikely that the court would lift either stay on its own initiative.  Accordingly, we expect the court will soon enter another order continuing the stay of the lawsuit and the August 19 compliance date for both the ATR and the payment provisions and setting a date for the parties to file another status report.

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...

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