CFPB’s Payday Pullback
AFSA appreciates the decision by the Consumer Financial Protection Bureau to suspend enforcement of the Payday, Vehicle Title, and Certain High-Cost Installment Loans regulation, specifically related to the payment withdrawal provisions and the payment disclosure provisions.
AFSA has consistently called on the Bureau to not implement a highly flawed set of policies without first undertaking a full evaluation of the so-called “Payday Rule” and its effects on consumers and businesses. As background, the rules were written almost a decade ago by the CFPB under then-Director Richard Cordray, yet former Director Rohit Chopra and the Biden Administration made its implementation without any review a priority.
When the payday rule was first proposed, AFSA responded that the rule would cut off access to credit for consumers who needed it. Substantial changes were made and when the rule was finalized, we were pleased with the changes. However, as AFSA members worked to implement the payments provisions, which apply to installment lenders and others, as well as payday lenders, it was apparent that the payments provisions would harm, not help borrowers. The rule would unnecessarily restrict borrowers’ payment options, potentially pushing borrowers into late payments. We also noted that the Rule would bury small-dollar lenders & their customers in red tape and recordkeeping.
In making the announcement, the Bureau noted that it took “this step in the interest of focusing resources on supporting hard-working American taxpayers, servicemen, veterans, and small businesses. The Bureau is further contemplating issuing a notice of proposed rulemaking to narrow the scope of the rule.” AFSA encourages that the Bureau review the rule, and we look forward to providing comments.
March 28th, 2025
