CFPB Announces Potential Payday Loan Rules
On March 26, 2015, the Consumer Financial Protection Bureau (CFPB) announced it is considering issuing proposals to end “payday debt traps.” A five-page fact sheet provides an overview of the potential proposals and a 57-page outline more fully explains the proposals under consideration.
The proposals would apply to payday loans, deposit advance loans, vehicle title loans, and other high-cost installment and open-end loans. The CFPB seeks to prevent debt traps by requiring lenders to determine that a consumer can afford to repay these types of loans. Potential proposals would target both short-term and long-term loans and include both debt trap prevention and protection requirements. Lenders would also have to abide by certain payment collection practices requirements.
CLA’s financial institution regulatory compliance team assists banks and credit unions nationwide in establishing regulatory compliance programs, conducting compliance testing, and training staff on regulations. Justin Robinson is a member of CLA’s regulatory compliance team and can be reached at justin.robinson@CLAconnect.com.
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