Saturday, November 27 2021

The CFPB and the two trading groups contesting the final 2017 CFPB Payday / Auto Title / High Yield Installment Loan Rule (2017 Rule) have filed briefs with the Texas Federal Court regarding a compliance date for the 2017 rule payment terms. The pleadings were made in response to the order of the court which required additional instruction “regarding the appropriate performance date if the court would reject the plaintiffs ‘motion for a summary judgment and allow the defendants’ motion for a summary judgment”.

In its short version, the CFPB argues that the fulfillment date suspension should apply for no more than 30 days after the court’s decision on the summary judgment. According to the Bureau, a 30-day extension would be equivalent to the requirement of the Administrative Procedure Act to give only 30 days notice before a regulation can take effect. The CFPB goes on to argue that payment policy compliance is not burdensome as neither of the two basic payment policy requirements (ie, new approval for withdrawals after two failed attempts and new communications) “requires a major overhaul of the lenders’ business”. Other factors that the CFPB cites in support of its position are that (1) the trading group had sufficient time to comply; (2) the trading groups could not reasonably have relied on the compliance date to continue beyond the final judgment , and (3) A further extension of the stay is unjustified in particular because the sole basis for the stay (ie the unconstitutional deportation provision) no longer applies with the decision of the US Supreme Court Seila law and the former director Kraninger ratified the payment terms.

In its short version, the trade groups argue that any order lifting the suspension should set the performance date no earlier than 445 days (or at least 286 days) from the date the court lifts the suspension, reflecting the time remaining for performance, when the suspension was requested (or entered). As originally announced, the 2017 rule gave lenders 21 months before compliance was required. According to the trading groups, the suspension extended the compliance period and its members reasonably relied on the suspension to postpone “the lengthy and costly implementation process”. They also argue that if the suspension has not exceeded the compliance deadline, the Bureau must set a new compliance date through setting rules for notices and comments. Finally, they argue that if the court upholds the CFPB’s summary judgment motion, it should uphold the stay pending appeal.

The parties have until August 16 to comment. The briefing mandate provides that the “[t]The court will fully inform the matter upon receipt of the parties’ responses and no response briefs are required. ”This means that in the worst case scenario, the court could uphold the CFPB’s summary judgment request by the end of this month and payment compliance by September could be required.

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