10/20/2021 | News release | Distributed by Public on 10/20/2021 22:25
On October 14, the Fifth Circuit issued a one paragraph order to extend a stay on Consumer Financial Protection Bureau (CFPB) payday lending regulations currently challenged by the Community Financial Services Association of America Ltd. and the Consumer Service Alliance of Texas. The stay will allow small dollar lenders to postpone the June 2022 compliance date.
Originally passed in 2017, the rule has faced persistent challenges. In 2020, a portion of the rule was repealed, which required payday lenders to assess borrowers' ability to repay loans. Industry groups continue to challenge the rule, which limits how many times lenders can attempt to debit payments from borrowers' bank accounts.
The two groups challenging the rule previously lost their case in a Texas district court, where the judge set a roughly nine-month countdown for the CFPB to implement the long-delayed rule starting in June. The Fifth Circuit's order resets the compliance date to 286 days after the appeal is complete.