The Payday, Vehicle Title, and Certain High-Cost Installment Loans (Payday Loan) Rule has been unfolding for years. Parts of the rule officially took effect on August 19, 2019; the Consumer Financial Protection Bureau (CFPB) has delayed the underwriting rules until November 19, 2020, and has further proposed eliminating those rules altogether. The August 19 date has been temporarily postponed by a court order.
Some lenders need to build a comprehensive compliance management system (CMS) to cope with the 1,700 page rule. Many others can comply using a less complex CMS that takes advantage of allowed exceptions.
All financial institutions must do something and must do it soon. As soon as the stay gets lifted certain requirements, including the requirement to implement a compliance program, are effective.
The payday lender rules were initially proposed in June 2016 with a final rule issued in October 2017 and published in the Federal Register on November 17, 2017. The rule was effective on January 16, 2018 with a compliance date of August 19, 2019 for most provisions. On February 6, 2019 the CFPB issued two proposed rules, one to rescind certain underwriting provisions and another to delay the effective date of the rule until November 19, 2020.
On June 6 2019, the Consumer Financial Protection Bureau (CFPB) issued a final rule to delay the August 19, 2019 compliance date for the mandatory underwriting provisions of the Payday Lending Rule to November 19, 2020.
To assist with your Payday Loan Rule compliance efforts we have developed two product bundles:
- The Payday Loan Rule Compliance Management System includes a Director/Senior Management Update, Training Manual, Policy Update, Procedures Update, Flowchart,and a Checklist.
- The Premium Payday Loan Rule Compliance Management System includes everything in the previous bundle plus a two-hour webinar recording.