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Payday Loan To Be Officially Reconsidered

As we noted yesterday morning, January 16, 2018 officially marked the effective date of the Consumer Financial Protection Bureau’s Payday Rule (see here).

Not a moment too soon, the CFPB issued a press release yesterday afternoon announcing that it “intends to engage in a rulemaking process so that the Bureau may reconsider the Payday Rule.” The release is brief and notes only that yesterday’s effective date triggers an April 16, 2018 application deadline for entities interested in becoming registered information systems (think credit reporting agencies for payday lending), but that the CFPB “may waive this deadline pursuant to 12 C.F.R. 1041.11(c)(3)(iii).” That provision of the Code of Federal Regulations is part of the Payday Rule itself and permits the CFPB to waive deadlines as to the registered information systems deadlines only.

The CFPB’s announcement is silent as to the impact of this “reconsideration” on compliance with those provisions of the Payday Rule that directly impact payday lenders, such as new requirements that covered lenders must determine consumers’ ability to repay. With no additional information regarding the timing for the forthcoming rulemaking or what modifications to the Rule are being considered, questions remain as to what covered institutions should do moving forward with the Payday Rule otherwise effectively on the books.

Particularly now that rulemaking on the Payday Rule is back on the table, interested stakeholders may want to engage in order to achieve their particular policy objectives.

We will continue to monitor the Rule and provide updates.

Copyright 2019 K & L Gates


About this Author

Jennifer Nagle, KL Gates Law Firm, Financial Services Litigation Attorney

Ms. Nagle is a partner in the litigation department of the firm's Boston office. She concentrates her practice in complex commercial litigation, with emphases in financial institutions and services litigation and class action litigation defense. Ms. Nagle has also counseled clients on compliance with various consumer financial services laws, and in connection with government inquiries into various servicing practices.

Robert W. Sparkes III, Complex Civil and commercial Litigation, KL Gates, Law Firm

Mr. Sparkes is a partner in the Boston office of K&L Gates with extensive experience in complex civil and commercial litigation, including federal and state class action litigation. Mr. Sparkes is a member of the firm’s Financial Institution and Services Litigation group and the Class Action Litigation Defense group. He regularly represents banking, mortgage lending, mortgage servicing, consumer financial services institutions, and other business entities in consumer class actions and individual litigation matters in federal and state courts throughout the United States, including in Massachusetts, California, Missouri, Michigan, Connecticut, Ohio, Delaware, Maryland, Arizona, West Virginia, New Jersey, Vermont, Washington, Illinois, Pennsylvania, and New York. These actions often concern challenges under federal statutes, including the federal Real Estate Settlement Procedures Act, the Truth in Lending Act, the Fair Debt Collection Practices Act, the Fair Credit Reporting Act, and the Racketeer Influenced and Corrupt Organizations Act, as well as state unfair and deceptive acts and practices statutes, and common law claims. Mr. Sparkes also has experience representing a variety of corporate and individual clients in contract, tort, class action, consumer protection, and other general business litigation and arbitration matters.