Free Lunch Podcast Episode 56 – Payday Lending Loans
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One of the final acts of former Bureau of Consumer Financial Protection (CFPB) Director Richard Cordray before he left to run for Governor of Ohio in 2017 was the issuance of a comprehensive rule governing payday loans, auto title loans, and other small dollar loans. The centerpiece of the rule would have imposed a new “Ability to Repay” (ATR) underwriting standard on providers of these small dollar products for extensions of credit to repeat borrowers. The Rule was scheduled to go into effect in August 2019. In January of this year, however, new CFPB Director Kathy Kraninger announced a Notice of Proposed Rulemaking that would rescind the ATR requirement. This teleforum discusses the logic of the 2017 Rule and the reasons for the CFPB’s reconsideration this year.
Foundation Professor of Law, Antonin Scalia Law School, George Mason University