Last week, Illinois enacted the “Predatory Loan Prevention Act” (SB 1792), which would place a 36% rate cap on nearly all non-bank consumer loans. This act will essentially outlaw small-dollar loans in Illinois and may make ancillary products on auto loans, such as GAP insurance, unavailable for a large number of consumers. The act
New Legislation in House, Senate Would Cap Consumer Loans at 36%, Crippling the Industry
New federal legislation introduced in the House and Senate would place a 36% annual percentage rate cap on nearly all consumer loans, potentially killing the small dollar consumer lending industry.
Last month, Congressmen Jesús G. “Chuy” García (D-IL) and Glen Grothman (R-WI) introduced H.R. 5050, the Veterans and Consumers Fair Credit Act. The bill
The NCUA Doubles Amount Credit Unions Can Offer for Payday Alternative Loans
At the September open meeting, the National Credit Union Administration (NCUA) voted 2-1 to approve the final rule related to expanding payday alternative loan options (PAL II). Although the NCUA made clear in the final rule that the PAL II does not replace the PAL I, the flexibility of the PAL II will create new
The CFPB (Yes, the CFPB!) Offers New Compliance Tools for Innovation
Companies that offer innovative consumer financial products and services have new tools to help them stay in compliance with federal consumer financial laws. In a refreshing twist from prior policy, the Consumer Financial Protection Bureau (CFPB) announced last week that it had revamped its No-Action Letter Policy and released a Compliance Assistance Sandbox and a
CFPB Settles with Freedom Debt Relief
On July 9, 2019, the United States District Court for the Northern District of California entered a stipulated final judgment and order in case number 17-cv-06484, Consumer Financial Protection Bureau v. Freedom Debt Relief, LLC, et al. Under the stipulated judgment, Freedom Debt Relief, LLC (Freedom Debt Relief is not related to Freedom Mortgage Company)
Stay of Litigation and Compliance Date Continued in Payday Lending Rule Lawsuit
Following the status report filed last week by the parties involved in the lawsuit challenging the CFPB’s Payday, Vehicle Title, and Certain High-Cost Installment Loans Rule, the Texas district court faced with the case ordered that the stay of litigation and the stay of the compliance date for the rule’s payment provisions are continued. The
FTC Imposes $110 Million Fine Against Payment Facilitator and Its Executives
Payment processor/facilitator Allied Wallet, its CEO, and two other corporate officers, recently agreed to settle Federal Trade Commission (FTC) charges that they assisted or knowingly processed fraudulent transactions for merchant-clients. This action indicates that enforcement actions against payment processors are alive and well, despite the FTC’s previously announced end of “Operation Chokepoint,” which, among other
California Latest State to Consider Lead Generation Licensing
On Wednesday, June 26, 2019, the California Senate Banking Committee will take up AB 642, which would add certain lead generation activities to the definition of “broker” under the California Financing Law (Cal. Fin. Code § 22004 et seq.). If passed, companies that engage in lead generation (“lead generators”) would be required to
CFPB Guts Major Component of Payday Lending Rule
Today, the CFPB proposed amendments to its Payday, Vehicle Title, and Certain High-Costs Installment Loans Rule. As anticipated, the bureau is proposing to rescind the rule’s requirements that lenders make certain ability-to-repay underwriting determinations before issuing payday, single-payment vehicle title, and longer-term balloon payment loans on the basis that such restrictions would limit consumer access
CFPB Settles with Payday Lenders for Deceptive Practices
Last week, in CFPB v. NDG Financial Corp. et al., the Consumer Financial Protection Bureau (CFPB) entered into a proposed settlement with several payday lenders and corporate officials based in Canada and Malta. As background, the corporate defendants consisted of a network of affiliated companies, known as the NDG Enterprise, which extended high-cost, short-term