CFPB Announces Plans To Reconsider Divisive Short-Term Lending Rule

On January 16, the Consumer Financial Protection Bureau announced its intention to reconsider a controversial rule affecting the short-term (payday) and auto-title lending industries. This reconsideration could signal that a stripped down rule that omits a number of the rule's more controversial provisions could be in the offing.

The original rule was finalized in October 2017, when Richard Cordray was still the head of the Bureau, and required lenders to determine whether a borrower could afford his or her loan payments while still meeting basic living expenses and other financial obligations. For short-term or auto-title loans due in a lump sum, lenders must determine whether a borrower can make a full payment of the total loan amount, plus any fees and finance charges, within two weeks or a month. For loans with a longer term and a balloon payment, lenders must determine whether a borrower can afford the highest total payments. The rule also includes