On February 6, 2019, the Consumer Financial Protection Bureau announced a proposal to roll back certain parts of its final rule in 2017 as to how lenders determine whether they will underwrite payday, single-payment vehicle title and longer-term balloon payment loans for certain borrowers.
The proposal began to take shape in October 2018, when then-Acting Director Mick Mulvaney announced that the CFPB would issue Notice of Proposed Rulemakings to lift some of the mandatory underwriting requirements of the final rule and change the date of compliance. In part, the CFPB will prohibit payday and other lenders from making repeated attempts to access a consumer’s bank account after the first two attempts have failed; further attempts at recovery must be done with the account holder’s consent.
In addition, the lender must provide written notice to the consumer before its first attempt to collect the debt, and any subsequent attempts, especially if the lender is looking to collect a different amount on a different day or from a different account. The proposed rule also seeks to push back the compliance date from August 19, 2019, to November 19, 2020.
The CFPB said that these proposals will protect consumers and allow them access to more credit. In the meantime, the agency is opening up a 90-day comment period on the new legislation.
“The Bureau will evaluate the comments, weigh the evidence and then make its decision,” said CFPB Director Kathy Kraninger. “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.”
Payday lenders often suggest they are helping people in need, but these lending schemes only keep unsuspecting borrowers in a cycle of debt, thereby ruining their credit. If you believe you are experiencing issues with your credit, you should seek help from an attorney knowledgeable in consumer protection. Robert Jacovetti is an experienced debt attorney who has helped countless residents of Long Island and the boroughs of New York City, including the Bronx, Brooklyn, Manhattan, Queens, and Staten Island, when they have been in over their heads financially. Whether you are unable to pay a loan or facing a debt collection lawsuit, you can rely on the experienced, compassionate representation of consumer protection lawyer Robert Jacovetti. For more information or to schedule a consultation, you can call (516) 217-4488 or schedule an appointment in our Mineola office.