Over three weeks have passed since the Consumer Financial Protection Bureau finalized a rule that places new limits on small-dollar lending, but leading GOP lawmakers are giving mixed signals about whether members of Congress will aid the financial companies that oppose the regulation — unlike the months-long battle they waged to block a separate CFPB provision on mandatory arbitration clauses.
Despite a flurry of skepticism from lawmakers and financial firms about the small-dollar lending rule while it was pending, the final version, released on Oct. 5, was met with a divided response from the financial services industry. In general, big banks stopped short of criticizing the rule after the CFPB decided to ease restrictions on small lenders such as credit unions, while the Consumer Bankers Association and the payday lending industry cried foul.
By comparison, groups representing the financial services industry were quick, and unified, in condemning the CFPB rule, when it was finalized on July 10, that hindered financial firms’ ability to require arbitration to settle legal disputes brought by consumers. Within 10 days, members of Congress had announced plans to introduce Congressional Review Act resolutions to block the regulation. They succeeded on Oct. 24 after Vice President Mike Pence broke a tie in the Senate to halt the rule.
The payday rule still hasn’t been published in the Federal Register, which is a prerequisite for it entering into force, but a CFPB spokesman said it’s been submitted for publication. Once the rule is officially transmitted to Congress, a lawmaker has 60 calendar days, not counting recess periods, to introduce a CRA resolution, according to the Congressional Research Service.