On Tuesday, August 11, 2020, the CFPB issued a second round of answers to frequently asked questions related to the Small Dollar Rule. The FAQ responses range from addressing more nuanced provisions of the payment provision portion of the rule to the overall coverage of the rule. Covered Loan Coverage For the most part, auto … Continue Reading
With the Supreme Court’s recent decision in Seila Law and Director Kathleen Kraninger’s ratification of the payment provisions of the Payday, Vehicle Title, and Certain High-Cost Installment Loans Rule (the “Small Dollar Rule”), the CFSA and the CFPB have submitted a joint status report in the stayed case pending in the Western District of Texas. … Continue Reading
On July 7, 2020, the Consumer Financial Protection Bureau (CFPB) issued its final rule in regard to so-called small dollar loans. The biggest change from the CFPB’s original iteration of the rule, the 2017 Payday, Vehicle Title, and Certain High-Cost Installment Loans Rule (“small dollar rule”) is the bureau’s decision to rescind the ability to … Continue Reading
Following previous guidance issued by (and in some cases withdrawn by) the OCC, CFPB, Federal Reserve, FDIC, and NCUA, the federal financial institution regulatory agencies published a joint statement on March 26, 2020, in response to COVID-19 “to specifically encourage financial institutions to offer responsible small-dollar loans to both consumers and small businesses.” The statement … Continue Reading
In response to the recent COVID-19 outbreak, Congress recently approved a $2 trillion stimulus package in an attempt to offset the potentially disastrous economic effects of COVID-19. Meanwhile, central banks are implementing increasingly drastic measures aimed at preserving the availability of capital during the looming recession, which appears increasingly imminent as the global economy remains … Continue Reading
The CFPB announced that it settled with Think Finance, LLC and six subsidiaries on February 5. The settlement follows protracted litigation beginning in November 2017 involving the CFPB’s allegations that Think Finance “engaged in unfair, deceptive, and abusive acts and practices in violation of the Consumer Financial Protection Act in connection with the illegal collection … Continue Reading
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 proposes … Continue Reading
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 … Continue Reading
In a recent decision by the Fourth Circuit, Big Picture Loans, LLC, an online lender owned and operated by the Lac Vieux Desert Band of Lake Superior Chippewa Indians, a federally recognized Indian tribe (“Tribe”), and Ascension Technologies, LLC, the Tribe’s management and consultant company successfully established that they are each arms of the Tribe … Continue Reading
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 … Continue Reading
