A recently introduced House bill would provide a mechanism to let states opt out of the CFPB’s newly announced rules regulating payday, auto title, and other short-term, small dollar loans.  On June 21, Congressman Scott Tipton (R-Colo.) introduced H.B. 5552 which would effectively amend the CFPB’s recently proposed rules.  If passed, the bill would allow states and federally-recognized Indian tribes to apply to the CFPB for a waiver that would exempt them from the proposed payday lending rules.  The bill allows for a five-year waiver, which can be extended an unlimited number of times in five-year increments.

In a statement, Tipton characterized his amendment as a way to counteract the CFPB’s entry into an area already occupied by many state laws:  “With this proposed rule, the Bureau has completely disregarded the efforts that a majority of states, including Colorado, have already made to protect families from predatory lending while preserving their access to short-term credit.”  Tipton noted that Colorado passed a set of reforms in 2010, designed to protect consumers from predatory loans, and said, “Our state legislators and government officials have already developed payday lending reforms that are benefitting Coloradans, but now the federal government wants to come in and completely override this work … .  I’m fighting to protect the 12 million Americans who need access to small dollar loans to pay for unexpected emergency expenses in order to keep their financial footing.”

The bill, titled the Accounting for Consumer Credit and Encouraging State Solutions Act of 2016, or the “ACCESS Act of 2016”, was introduced in the House and has been referred to the House Committee on Financial Services.