Court temporarily suspends compliance with CFPB payday rule

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On August 31, the U.S. District Court for the Western District of Texas allowed summary judgment in favor of CFPB in an action brought by two trade groups challenging the payment provisions of the Bureau’s 2017 Final Rule on “Payday Loans, Vehicle Title and Certain High Cost Installment Loans” (Rule of 2017), but suspended the August 19, 2019 compliance date for 286 days after the final judgment as requested by the plaintiffs. As previously covered by InfoBytes, the plaintiffs challenged the compliance date of the payment provisions of the 2017 rule and asked the court to overturn the 2017 rule and the Office’s ratification of the payment provisions of the 2017 rule as unconstitutional and in violation. of the Law on Administrative Procedures.

By granting summary judgment at the Bureau, the court ruled that the ratification “was valid and remedied the constitutional prejudice caused by the approval of the 2017 rule by a misnamed official.” Among other things, the court also found that the payment provisions, in law, “conform to the statutory authority of the Office and are not arbitrary or capricious” and that the Office properly considered the costs and benefits of such payment arrangements. However, in granting the request for an extension of the stay of the plaintiffs, the court declared that it was convinced by the arguments of the plaintiffs “that they should benefit fully from the temporary suspension and that a more important compliance date leaves a appeal period ”, in accordance with the fact that the“ stay was requested with 445 days remaining until the deadline for implementation, and it was entered with 286 days remaining ”.


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