Congressional Repeal Deadline Passes—What’s Next for the BCFP Small Dollar Lending Rule?
The bureau continues to reconsider the rule finalized last year as it faces a lawsuit from lending industry groups.
5/18/2018 3:00 PM
It looks like Congress will not repeal the Bureau of Consumer Financial Protection’s small dollar lending rule as the deadline for action has passed. Under the leadership of Acting Director Mick Mulvaney, the BCFP continues to reconsider the rule, a step it has taken with many Richard Cordray-era decisions.
Meanwhile, the bureau is facing a lawsuit filed by two industry groups representing payday lenders who are challenging the bureau’s authority to implement a rule over the small-dollar lending market.
The Community Financial Services Association of America (CFSA) and the Consumer Service Alliance of Texas are seeking to invalidate the BCFP’s final rule on “Payday, Vehicle and Certain High-Cost Installment Loans,” implemented in 2017 under former Director Richard Cordray, ACA International previously reported.
The Congressional Review Act allows legislators to reverse recently finalized rules within a set timeframe based on a simple majority—which Republicans have in both the House and Senate—and upon the president’s approval.
The Hill reports Congress needed to act on its repeal resolution within 60 days, which expired May 16.
As part of the BCFP’s review of the final rule, Mulvaney halted the deadlines for businesses to be in compliance, it reports.
ACA International opposed the original rule for the small dollar lending market due to the bureau’s process leading up to the issuance of the proposed regulation. ACA remains hopeful that under new leadership, the bureau will take appropriate steps in all rulemakings to ensure that any new regulations are reflective of operational realities, solve an actual as opposed to a perceived problem in the marketplace, are based on empirical evidence, and adhere to important statutory requirements.
ACA International will continue to follow the reconsideration of this rule by the bureau.
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