Tik Tok: Compliance clock ticks for small lenders in 2020 | Hudson Cook, LLP
[co-author: Hurshell K. Brown – Beyond Finance, LLC]
Low dollar lenders have waited for most of 2020 for the Consumer Financial Protection Bureau (âCFPBâ) final decision on payday, vehicle title and certain high cost installment loans. In the meantime, the CFPB, the Federal Trade Commission (âFTCâ) and various states have continued to take measures to restrict certain practices. This investigation examines compliance issues related to the low-value lending industry over the past year, including federal rule-making, federal and state enforcement actions, major court decisions, and government legislation. States.
SMALL DOLLAR RULES DEVELOPMENT
In July 2020, the CFPB ratified the payment provisions included in the 2017 final rule governing payday loans, vehicle title and certain high-cost installment loans, overriding the repayment capacity provisions of this regulation. Payment provisions prohibit certain behaviors, require consumer notices in certain cases, and regulate how low-value lenders with covered loans obtain payment transfers from borrowers. As of this writing, the United States District Court for the Western District of Texas has suspended the regulatory compliance date in connection with a pending case between the CFPB and trade groups.
Originally published in The Business Lawyer; Flight. 76, spring 2021.
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