CFPB says its 2017 payday lending rule will become mandatory

Following a court decision, compliance with the CFPB’s payment provisions in the bureau’s 2017 rule on payday, vehicle title and certain high-cost installment loans will become mandatory on June 13, 2022.

The decision by the U.S. District Court for the Western District of Texas reaffirms the CFPB’s payment provisions, which aim to protect borrowers from unfair and abusive payment practices in payday lending and other markets covered by the rule.

“These provisions will prohibit lenders from continuing to attempt to withdraw payment from borrowers’ accounts after two attempts have failed, which will protect borrowers from being hit with multiple fees for returned payments or insufficient funds and reduce the risk that consumers’ accounts will be closed,” said David Uejio, the bureau’s acting director, in a statement on Tuesday.

Uejio said that the CFPB expects lenders to follow the requirements of the payment provisions, consistent with the court’s order.

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