Comments to Consumer Financial Protection Bureau re Payday Loan Protections

Comment to CFPB re Payday Loans (03/18/19) Comment to CFPB re Rescinding the Payday Rule’s Underwriting Protections (05/15/19) Executive Summary, Comment to CFPB re Rescinding the Payday Rule’s Underwriting Protections (05/15/19)

In the fall of 2017, after more than five years of outreach and research, the Consumer Financial Protection Bureau (CFPB) issued its “Payday Rule” to address consumer harms caused by payday loans, vehicle-title loans, and certain other loans with similar features. In late November 2017, however, the CFPB’s leadership changed, and the new leadership began a series of efforts to change or eliminate the Payday Rule. In February 2019, the CFPB issued rulemaking proposals to delay and then rescind key aspects of the Rule. The proposals focused on the Rule’s underwriting provisions. These provisions protect consumers by recognizing that it is an unfair and abusive practice for payday- and title-lenders to make loans without determining that consumers can repay them; requiring, for certain loans, that lenders determine that borrowers can repay them; and imposing other limits on lending practices to reduce the harms that consumer suffer from unaffordable loans.

Public Citizen strongly denounced both proposals in two comment letters. In its March 2019 comment, it criticized the delay proposal and urged the CFPB to maintain the Payday Rule’s 2019 implementation date. In May 2019, Public Citizen, as part of a coalition of consumer, civil rights, and labor groups, submitted a comprehensive rebuttal to the CFPB’s proposal to rescind the Payday Rule’s underwriting protections.