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CFPB finalizes NAFCU-backed payday rule delay
The CFPB Thursday issued a NAFCU-sought final rulemaking to delay the Aug. 19 compliance date of its payday-lending rule by 15 months to Nov. 19, 2020. The bureau also made correcting amendments to the rule to address errors.
At the time the bureau issued the proposal to delay the rule, NAFCU President and CEO Dan Berger shared the association's support.
"We are pleased that the CFPB is going to delay the payday rule for further consideration," Berger said. "NAFCU supports the removal of problematic ability to repay portions of the rule, but we also want to ensure that, going forward, the egregious practices of certain payday lenders are addressed. Credit unions provide many forms of small-dollar loans and other affordable products to their members, and NAFCU urges all consumers to consider a credit union for their financial needs."
NAFCU also officially commented on the proposal, offering its support of a delay "to allow the Bureau time to expand the Payday Rule's safe harbor exemption to encompass all future iterations of [payday alternative loans (PALs)] finalized by the [NCUA]. NAFCU cannot fully support a Revised Rule that refuses to exclude all future PALs programs."
While the final payday rule addressed many concerns raised by the association to ensure credit unions' ability to meet consumers' needs for short-term, small-dollar loans, NAFCU will continue to ask the bureau to expand the rule's safe harbor as the NCUA seeks to enhance its payday alternative loans (PALS) program.
Last month, NAFCU Director of Regulatory Affairs Ann Kossachev and Regulatory Affairs Counsel Kaley Schafer were joined by member credit unions in meetings with the CFPB and NCUA to discuss issues related to the rule.
The bureau also released a table of contents for the final rule as well as an unofficial redline to assist credit unions in reviewing the changes that the final rule makes.