12/4/2017 3:00:00 PM
Bipartisan resolution introduced to nullify a controversial rule that bans consumers from accessing short-term, small-dollar credit.
The Consumer Financial Protection Bureau is facing another challenge to rulemaking implemented under the leadership of former director Richard Cordray.
Several Republicans and Democrats in the House of Representatives introduced bipartisan legislation to nullify the CFPB’s final rule for the small-dollar lending market using the Congressional Review Act (CRA), according to a Dec. 1 news release from the House Financial Services Committee.
The CRA 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 small-dollar lending rule, finalized in the months before Cordray resigned, imposes complex new requirements on payday loans, auto title loans, deposit advance products and longer-term loans with balloon payments, ACA International previously reported.
According to the committee’s news release, “short-term, small-dollar loans are already regulated by all 50 states, the District of Columbia and Native American tribes. The CFPB’s rule would mark the first time the federal government has gotten involved in the regulation of these loans.”
The bipartisan legislation introduced Dec. 1, which also seeks to prevent the CFPB from issuing a similar rule on small-dollar lending in the future, is sponsored by U.S. Rep. Dennis Ross, R-Fla., and co-sponsored by U.S. Reps. Alcee Hastings, D-Fla., Tom Graves, R-Ga., Henry Cueller, D-Texas, Steve Stivers, R-Ohio and Collin Peterson, D-Minn.
“I and my colleagues in Congress cannot stand by while an unaccountable federal agency deprives our constituents of a lifeline in times of need, all while usurping state authority. Today, we are taking bipartisan action to stop this harmful bureaucratic overreach dead in its tracks,” Ross said in the news release.
The legislation announced Dec. 1 is another important step showing the deregulatory environment that could lie ahead as leadership changes continue at the CFPB.
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