Payday lending

Most states have some kind of pricing limit on consumer loans. But proposals for a national usury law divide even Democrats, some of whom are concerned about restricting credit.

Think Finance, which had teamed with tribal lenders to offer high interest installment loans, could no longer make or collect on loans in states that have caps on interest rates, under terms of a proposed settlement with the Consumer Financial Protection Bureau.

In a letter to the agency's inspector general, the 15 lawmakers pointed to specific cases where they said the bureau departed from legal standards in deciding not to require restitution.

Former CFPB Director Richard Cordray and consumer advocates have designed a proposed state consumer agency that would subject more financial firms and fintechs to state oversight.

The Consumer Financial Protection Bureau faces a busy policy agenda heading into the new year, as well as strong external forces that are beyond its control.

The state has proposed a law to cap the interest rate on certain consumer loans, but nonbanks aim to skirt it by seeking a rent-a-charter.

Federal and state policymakers wagged their fingers this week at high-cost lenders that might be looking to team with banks to evade a 36% ceiling on interest rates.

In an update of its rulemaking agenda, the bureau said it "expects to take final action in April 2020" on a proposal that would rescind strong underwriting requirements.

In her second day of congressional testimony, Kathy Kraninger took heat from Senate Democrats for weighing in on constitutional questions about her agency and for her enforcement track record.

CFPB Director Kathy Kraninger faced a barrage of questions from Democrats on the House Financial Services Committee over why the agency has not demanded refunds for consumers in recent settlements.

The legislation, which passed a key test in the state Senate on Wednesday, is the product of a compromise between consumer advocates and some lenders.

The CFPB issued a final rule late Thursday to delay the compliance date for mandatory underwriting provisions of the 2017 payday lending rule.

Kathy Kraninger, the bureau's director, is in a standoff with Democrats about her claim that the agency cannot supervise institutions under the Military Lending Act.

The AGs say the agency's plan to rescind ability-to-repay requirements for payday loans would undermine states' ability to enforce their own laws.

The official told lawmakers Thursday that the research underlying the bureau's 2017 payday rule proposal did not support strict underwriting requirements of small-dollar loans.

A panel of federal judges determined that Think Finance and an online tribal payday lender must comply with state interest rate and licensing laws.

The proposed rollback of underwriting requirements for small-dollar lenders could redefine a legal doctrine that governs rules affecting other companies as well.

Assemblywoman Monique Limon is in the “early stages” of exploring how to create a state-level Consumer Financial Protection Bureau as part of a broader push for more consumer protection for state residents.

The bureau's director, Kathy Kraninger, faced a barrage of criticism from Senate Democrats on the agency's lack of enforcement actions, a reversal on Military Lending Act examinations and changes to the payday loans rule.

The installment lender, which bills itself as an alternative to payday lenders, targets underserved communities and operates through a network of retail partners.