Payday lenders have already scored a huge victory as the Consumer Financial Protection Bureau moves forward on revising unpopular underwriting requirements imposed by the agency's past leadership. But many in the industry say they still want more.
Those affected by the CFPB's payday lending rule hailed the agency's announcement last week of plans to propose changes next year. But they expressed disappointment that the CFPB will address just the rule's "ability-to-repay" provisions, and not limits on how often a lender can debit a borrower's account.
“We would prefer to have the CFPB redo the whole rule,” said Mary Jackson, CEO of the Online Lenders Alliance. “The payment section of the rule is already outdated and if the current rule goes into effect it seems duplicative and unnecessary.”
The agency under acting Director Mick Mulvaney has long been committed to easing the payday lending rule, drafted under former Director Richard Cordray, but the effort faces numerous obstacles.
The bureau faces a deadline to revamp the rule of August 2019, when many of the Cordray-era requirements are set to take effect. Consumer groups, meanwhile, appear poised to challenge any rule rewrite in court, arguing that an overhaul of an existing rule violates the Administration Procedure Act.
Read more in American Banker.