Ruling sets payday loan rule compliance date
(Sept. 10, 2021) Payment provisions in a 2017 rule on payday loans were upheld by a federal court in Texas this week, essentially turning back a challenge to the four-year-old regulation.
The ruling means compliance with the rule will become mandatory in mid-2022.
In a statement, CFPB) Acting Director Dave Uejio said the decision issued in the U.S. District Court for the Western District of Texas reaffirms the agency’s ability to protect borrowers from unfair and abusive payment practices by payday lenders and others covered by the rule.
“Today’s ruling will provide relief to all those who could face these practices,” Uejio said. “The CFPB expects lenders to follow the requirements of the payment provisions, consistent with the court’s order.”
Under the ruling, the mandatory compliance date will be June 13, 2022.
Uejio asserted that the provisions of the rule would prohibit lenders from continuing to attempt to withdraw payment from borrowers’ accounts after two attempts have failed. He said that would protect borrowers from being subject to multiple fees for returned payments or insufficient funds and reduce the risk that consumers’ accounts will be closed.
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