District Judge Sides With CFPB, Upholds Payday Rule's Payment Provisions

On August 31, 2021, a federal district court judge in Texas granted summary judgment to the Consumer Financial Protection Bureau in a lawsuit brought by two industry trade associations, ultimately upholding the "payment provisions" of the CFPB's Payday, Vehicle Title, and Certain High-Cost Installment Loans Rule (CFPB Payday Rule) first issued in November 2017.

As explained in a previous client alert covering the lawsuit's three-year history, the trade groups sought to prevent implementation of the payment provisions of the CFPB's Payday Rule. The groups argued that such provisions were unlawful because the ratification of the CFPB Payday Rule by the CFPB's director was inadequate, and the provisions fell outside of the CFPB's legal authority. The judge rejected all of the trade associations' challenges, noting that the payment provisions were not void ab initio and that a constitutionally appointed director had properly ratified the provisions. The court also