From The Web: BCFP Could Eliminate Repayment Test in Small-Dollar Lending Rule


An announcement on the status of the rule is expected later this month, Bloomberg Law reports.

10/26/2018 10:00

Following the release of the Bureau of Consumer Financial Protection’s fall rulemaking agenda, Bloomberg Law reports that the BCFP is considering removing a requirement to determine consumers’ ability to repay loans as it reconsiders the rule proposed under former Director Richard Cordray’s tenure.

“The [bureau] is expected to either propose eliminating the rule’s strict ability to repay standards or delaying their effective date so that they can undergo further review, according to multiple sources with knowledge of the rulemaking process,” according to the article.

Under the leadership of Acting Director Mick Mulvaney,  the BCFP continues to reconsider the rule, a step it has taken with many Cordray-era decisions, ACA International previously reported.

Bloomberg Law also reports a senior official with the BCFP said the bureau “would have further announcements about the rule later this month.”

“Other aspects of the CFPB’s rule relating to payments—including disclosures about when money is taken out of consumers’ bank accounts for the first time and restrictions on withdrawals when consumers’ bank accounts have insufficient funds—are expected to survive the bureau’s rulemaking process, the sources said,” according to the article.

A Notice of Proposed Rulemaking (NPRM) on the reconsideration of the small dollar lending rule addressing its merits and changes to the compliance date (currently August 2019) is expected no later than early next year, according to the latest rulemaking agenda released this month, ACA previously reported.

ACA International previously questioned the bureau’s process leading up to the issuance of the small dollar loan 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.

Meanwhile, the bureau continues to engage in pre-rulemaking activities for debt collection.

As noted in its latest rulemaking agenda, the bureau expects to issue a Notice of Proposed Rulemaking (NPRM), addressing issues including communication practices and consumer disclosures, by March 2019.

The agenda also includes updates on debt collection and small-dollar lending regulations.

Related Content from ACA International:

BCFP Regulatory Agenda: Debt Collection Rule Remains on Deck for March 2019