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CFPB to Reconsider Small-Dollar Rule
In a statement on Tuesday, January 16, 2018, the CFPB said it intends to engage in a rulemaking process to reconsider the Small-Dollar Rule. Compliance with the rule by lenders is not mandatory until August 19, 2019, so the rulemaking would take place between now and then. As a technical matter, today was the official "effective date" of the final rule as published in the Federal Register; and the CFPB has delayed today's effective date while reconsideration is underway.
The CFPB also states: "Today's effective date also establishes April 16, 2018, as the deadline to submit an application for preliminary approval to become a registered information system ("RIS") under the Payday Rule. However, the Bureau may waive this deadline pursuant to 12 C.F.R. 1041.11(c)(3)(iii). Recognizing that this preliminary application deadline might cause some entities to engage in work in preparing an application to become a RIS, the Bureau will entertain waiver requests from any potential applicant."
CBA President and CEO Richard Hunt applauded the Bureau's decision, stating: "The CFPB's decision to revisit its small-dollar rule is welcomed news for the millions of American consumers experiencing financial hardship and in need of small-dollar credit. Under the current rule, many banks are forced to sit on the sidelines and prevented from offering affordable and popular small-dollar credit options to help meet the needs of their customers. As the CFPB reconsiders this rule, we encourage the Bureau to work with bank regulatory agencies to examine the use of bank offered small-dollar lending products, such as deposit advance products, and ensure any final rule treats all banks equally."
For more information on CBA's involvement in the Small-Dollar Rule, see the following resources: