On September 10, Consumer Financial Protection Bureau Director Richard Cordray refused an appeal by members of Florida’s congressional delegation and the state’s top financial regulator to use Florida’s payday-lending rules as a model for planned federal regulation. According to one source, Cordray indicated in a private meeting that he disagreed with certain aspects of Florida’s law, including the number of loans that borrowers could obtain in a one-year period.
Previously, Florida regulators had contacted Cordray via numerous letters requesting the CFPB’s consideration of their state law as a federal regulatory option. In March 2015, the CFPB proposed its own payday rules which, among other things, prohibit borrowers from obtaining multiple loans at the same time, limit the interest rates that payday lenders could charge, and require lenders to assess borrowers’ ability to pay.
In a followup to the private meeting, CFPB spokeswoman Jennifer Howard stated, “We cannot comment on what the upcoming proposal will include. In general, making sure that someone has the ability to repay a loan is common sense. In a healthy market, lenders benefit by extending loans that borrowers can afford, not by pushing borrowers into debt traps.” Howard added, “The CFPB has met with a broad range of stakeholders as part of the process of considering payday rules. We have conducted substantial outreach with lenders, consumer advocates, and state and local officials to get feedback on the Bureau’s outline of proposals. After the Bureau’s notice of proposed rulemaking is released, the Bureau looks forward to receiving comments from stakeholders about the proposals. We also have studied the impact of state payday regulations across the country. This analysis informs our ongoing rulemaking process.”
The CFPB intends to move forward with a payday rule proposal announced in March of this year.