THE BLOG

08
Jul

CFPB Update: Payday, Vehicle Title, & Installment Lending Rule

PaydayLoanIndustryBlog.com      702-208-6736

CFPB Update: Payday, Vehicle Title, and High-Cost Installment Lending Rule: Payment-Related Requirements

Small Entity Compliance Guide

Table of contents

1. Introduction

1. Scope and focus of this guide

2. A brief summary of Payday Lending Rule’s payment-related requirements, effective date, and the compliance date

3. Use of examples in this guide

4. Additional implementation resources

2. Covered loans

1. Covered short-term loans

2. Covered longer-term balloon-payment loans

3. Covered longer-term loans

4. Exclusions from coverage

5. Conditional exemptions

3. Lenders and service providers under the Payday Lending Rule

1. Lenders

2. Service providers.

4. Prohibited payment transfer attempts

1. Payment transfers

2. Conditional exclusion for certain transfers made by an account-holding institution

3. Exception for additional payment transfers authorized by the consumer in a new and specific authorization

4. Single immediate payment transfers at the consumer’s request

SMALL ENTITY COMPLIANCE GUIDE: PAYDAY LENDING RULE: PAYMENT-RELATED REQUIREMENTS

Prohibition on evasion

Disclosure of payment transfer attempts

General form and delivery requirements for notices

1. First payment withdrawal notices

2. Unusual payment withdrawal notices

3. Consumer rights notices

4. Electronic short notices.

Compliance program and record retention

1. Compliance program

2. Record retention

3. Prohibition on evasion

Payday Loans, Title Loans Installment Loans: CFPB

Payday Loans, Title Loans Installment Loans: CFPB

1. Introduction

On October 5, 2017, the Consumer Financial Protection Bureau (Bureau) issued a final rule governing certain personal loans with short-term or balloon-payment structures and certain additional installment loan products (2017 Payday Lending Rule).

On February 6, 2019, the Bureau issued: (1) a notice of proposed rulemaking to reconsider the 2017 Payday Lending Rule’s mandatory underwriting provisions;(1)and (2) a notice of proposed rulemaking to delay the August 19, 2019 compliance date of the mandatory underwriting provisions.

On June 6, 2019, the Bureau issued a final rule (Delay Final Rule)3 finalizing the second of these two proposals. The Delay Final Rule delays the August 1 9, 201 9 compliance date for the 2017 Payday Lending Rule’s mandatory underwriting provisions to November 19, 2020, and makes technical corrections to the 2017 Payday Lending Rule.

This guide uses the term “Payday Lending Rule” or “Rule” to refer to the 2017 Payday Lending Rule as amended by the Delay Final Rule.T he proposed rulemaking does not reconsider the payment-related requirements of the Payday Lending Rule. Thus, this guide highlights information that may be helpful when implementing the payment-related requirements of the Payday Lending Rule. It does not discuss the Rule’s mandatory underwriting provisions. As appropriate, the Bureau will revise this guide to assist.

SMALL ENTITY COMPLIANCE GUIDE: PAYDAY LENDING RULE: PAYMENT-RELATED REQUIREMENTS

An industry with the implementation of the Payday Lending Rule’s mandatory underwriting provisions at a later date. This guide meets the requirements of Section 21 2 of the Small Business Regulatory Enforcement Fairness Act of 1996 with regard to the Payday Lending Rule’s payment-related requirements. This guide is not a substitute for reviewing the Payday Lending Rule. The Payday Lending Rule and its Official Interpretations (also known as the commentary) are the definitive sources of information regarding the Payday Lending Rule’s requirements. The Payday Lending Rule is available.

cfpb_payday_small-entity-compliance-guide-07-08-19
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07
Jun

Consumers Rejoice! CFPB Issues Final Rule on Payday Loan Underwriting

More good news for USA households as the CFPB recognizes access to credit for all at competitive rates is preferable to zero financial choices!

On June 6, 2019, the Bureau issued a final rule delaying the August 19, 2019 compliance date for the Mandatory Underwriting Provisions of the 2017 Payday Lending Rule to November 19, 2020.

June 6, 2019

Executive Summary of Delay Final Rule’sAmendments to the 2017 payday lending Rule

On June 6, 2019, the Consumer Financial Protection Bureau (Bureau) issued a final rule (Delay Final Rule) delaying the compliance date for the Mandatory Underwriting Provisions of the Bureau’s 2017 rule governing Payday, Vehicle Title, and Certain High-Cost Installment Loans (2017 Payday Lending Rule).

The Delay Final Rule also makes certain technical corrections to the 2017 Payday Lending Rule.

This executive summary provides an overview of the Delay Final Rule but is not a substitute for reviewing the Delay Final Rule itself.

Background On October 5, 2017, the Bureau issued the 2017 Payday Lending Rule to establish regulations for payday loans, vehicle title loans, and certain high-cost installment loans.

The 2017 Payday Lending Rule addressed two discrete topics.

First, it contained a set of provisions with respect to the underwriting of certain covered loans and related reporting and recordkeeping requirements. These provisions are referred to herein as the “Mandatory Underwriting Provisions.”

Second, it contained a set of provisions establishing certain requirements and limitations with respect to attempts to withdraw payments from consumers’ checking or other accounts and related recordkeeping requirements. These provisions are referred to herein as the“Payment Provisions.”

The Bureau also provided an unofficial redline and an executive summary.

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14
Mar

HELP! Ability to Repay Rule by CFPB: Notice of Proposed Rulemaking & Payday Loans

HELP!

There is a CFPB Notice of Proposed Rulemaking [NPRM] expiring May 15th that rescinds the ATR (Ability To Repay) portion of the rule.

YOU SUPPORT THIS NPRM to help your customers, your employees, your family, and your business!

So… stop whatever you’re doing now! Provide comments and engage your customers.

FiSCA (Financial Service Centers of America) has MADE THIS REALLY EASY FOR US!

FISCA created the “We Deserve Credit” campaign to assist in engaging our customers and employees in this important effort.

How Can You Help? Generate comments & petitions! Just like our antagonists do. Remember my EXAMPLES? CLICK HERE

How to start a payday loan business

Payday Loans & the CFPB

The FISCA “We Deserve Credit” Campaign makes it easy.

Comments:
Gather comments & signatures for the petition to support the NPRM.

FiSCA has set up an easy way to do both. Share FISCA’s web portal with customers and employees. Computers, tablets, and smartphones can be set up in your offices for customers to use. Same IP address? Not a problem.
The link for the comment portal is http://www.wedeservecredit.com

Petition:
The link for the petition portal where a customer can just sign the petition and not leave a comment.
http://www.wedeservecredit.com/petition

How you can get the word out? EASY!
FiSCA has resources to help you publicize this campaign. There are links below for promotional materials as well as sample email and text messages.

Poster: FISCA Poster PDF

HandOut: FISCA Handout PDF

Click Here for FISCA sample emails and text messages:

Keep a count of how many emails/text messages you send out. Please keep track of the number of recipients for each email/text message you send out.

More support is on the way from FISCA! They are engaging an outline that company owners, shareholders, etc. will use to write their own letter.

Your customers and employees MUST be alerted. They will suffer the most if you fail to act.

We’re smart! We’ll survive if we fail to take action TODAY! Our customers, our employees, our vendors, our local retailers… may not.

Meanwhile, to start or improve your loan business, Click Here to Begin. Schedule a call or pick up a copy [PDF] of the latest version of our “Bible: How to Loan Money to the Masses Profitably.”

Jer@PaydayLoanIndustryBlog.com 702-208-6736 Starting a loan biz? Buying a loan biz? Need to improve your loan biz? Reach out…

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07
Feb

President Trump, Consumers, The PDL Industry & the CFPB Party to the Beat of New Rules

 

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06
Feb

CFPB Proposed “Payday Loan Ability to Repay Rule” Rescind: Great News

The CFPB issued a positive press release today regarding the payday loan industry.

Consumers, lenders, employees, property owners, tax revenue, deregulation, competition… ALL WINNERS!

Washington, D.C. — The Consumer Financial Protection Bureau today is proposing to rescind certain provisions of its 2017 final rule governing “Payday, Vehicle Title, and Certain High-Cost Installment Loans.” Specifically, the Bureau is proposing to rescind the rule’s requirements that lenders make certain underwriting determinations before issuing payday, single-payment vehicle title, and longer-term balloon payment loans. The Bureau is preliminarily finding that rescinding this requirement would increase consumer access to credit.

In October 2018, under the leadership of then-Acting Director Mulvaney, the Bureau announced that it would issue Notice of Proposed Rulemakings (NPRMs) to reconsider the rule’s mandatory underwriting requirements and to address the rule’s compliance date. The proposals the Bureau is releasing today fulfill that commitment.

The Bureau’s proposal suggests there was insufficient evidence and legal support for the mandatory underwriting provisions in the 2017 final rule. Additionally, the Bureau is concerned that these provisions would reduce access to credit and competition in states that have determined that it is in their residents’ interests to be able to use such products, subject to state-law limitations. The NPRM proposing to rescind the mandatory underwriting requirement is open to public comment for 90 days.

In a separate notice issued today, the Bureau is also proposing to delay the August 19, 2019 compliance date for the mandatory underwriting provisions of the 2017 final rule to November 19, 2020. The NPRM proposing the delay is open to public comment for 30 days.

Today’s NPRMs do not propose to reconsider the provisions of the 2017 final rule governing payments, including reconsidering the scope of their coverage.  The payment provisions prohibit payday and certain other lenders from making a new attempt to withdraw funds from an account where two consecutive attempts have failed unless consumers consent to further withdrawals. The payment provisions also require such lenders to provide consumers with written notice before making their first attempt to withdraw payment from their accounts and before subsequent attempts that involve different dates, amounts, or payment channels. These provisions are intended to increase consumer protections from harm associated with lenders’ payment practices.

“The Bureau will evaluate the comments, weigh the evidence, and then make its decision,” said Kathy Kraninger, Director of the Consumer Financial Protection Bureau. “In the meantime, I look forward to working with fellow state and federal regulators to enforce the law against bad actors and encourage robust market competition to improve access, quality, and cost of credit for consumers.”

The NPRMs can be viewed here: https://files.consumerfinance.gov/f/documents/cfpb_payday_nprm-2019-reconsideration.pdf  and https://files.consumerfinance.gov/f/documents/cfpb_payday_nprm-2019-delay.pdf

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