House Amendment Could Stymie CFPB Payday Rulemaking
The U.S. House of Representatives Committee on Appropriations recently approved its Fiscal Year 2017 Financial Services and General Government Appropriations Bill, and its passage (30-17) represents a thorn in the side of the CFPB because, if passed, it will delay the bureau’s regulations for payday loans.
An amendment to the spending bill prohibits the CFPB from finalizing or implementing a rule restricting payday lending until the agency submits a report, including public comment, on how the rule would affect consumers with limited access to credit. The amendment, which was adopted 30-18, also stipulates that the CFPB must identify existing credit products available to replace current short-term and small-dollar credit sources. The bipartisan bill is sponsored by Reps. Steven Palazzo (R-Miss.) and Henry Cuellar (D-Texas).
The CFPB, in April, released a report critical of payday lenders’ practice of debiting borrowers’ checking accounts and followed up with a proposed rule earlier this month, which by the bureau’s own estimates will eliminate 84 percent of short-term loans in the market.