Yesterday, the Consumer Financial Protection Bureau (“CFPB” or the “Bureau”) announced that it “intends to engage in a rulemaking process so that the Bureau may reconsider the Payday Rule.” The Payday Rule, previously published last fall, became effective on January 16, 2018.
The announcement may be a first step toward substantially reversing or eliminating the Payday Rule. The CFPB’s announcement follows December’s introduction in the House of Representatives of a bi-partisan resolution to, in effect, repeal the rule under the Congressional Review Act—similar to the legislation introduced effectively nullifying the Bureau’s arbitration rule—and may precipitate a substantial scaling back of the rule by the Bureau itself. As a result, the CFPB’s announcement is sure to become an issue in confirmation hearings for the next CFPB Director, since the next Director will decide what changes, if any, to make to the Payday Rule.
The announcement serves as a means of eliminating industry compliance uncertainty and maintaining the status quo while regulatory policy and agency leadership is in flux. Although the compliance date for most provisions is August 19, 2019, yesterday’s effective date also makes April 16, 2018, the deadline for submitting an application for preliminary approval to become a registered information system under the Payday Rule. In its announcement, the CFPB encouraged potential applicants for preliminary approval to become a registered information system under the Payday Rule to request a waiver of the April 16, 2018 deadline to submit applications. Another recent CFPB release addressed industry concerns about complying with the Prepaid Account Rule beginning in April 2018 while proposed amendments to the Prepaid Account Rule remain outstanding.