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House Financial Services Ranking Member on CFPB Proposed Rulemaking on Payday Lending

Washington, Feb 6 -

WASHINGTON – Congressman Patrick McHenry (NC-10), Republican leader of the House Financial Services Committee, issued the following statement after the Consumer Financial Protection Bureau (CFPB) announced two Notices of Proposed Rulemaking (NPRMs) that update the Bureau's stance on payday loans:

“I am encouraged to see Director Kraninger relying on facts and robust data, rather than outdated studies and practices when it comes to this important issue. Today’s CFPB announcement on an updated payday lending rule and extended comment period will allow all stakeholders another chance to weigh in and establish new underwriting criteria. Most importantly, it will give consumers the opportunity to make their own decisions on credit availability needs for themselves and their families.”

Background:

Per the CFPB, “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.”

• NPRM 1:
• Suggests there was insufficient evidence and legal support for the mandatory underwriting provisions in the 2017 final rule.
• Proposes to rescind the mandatory underwriting requirement.
• Open to public comment for 90 days.
• NPRM 2:
• Proposes to delay the August 19, 2019 compliance date for the mandatory underwriting provisions of the 2017 final rule to November 19, 2020.
• The delay is open to public comment for 30 days.