On July 7, 2020, the Consumer Financial Protection Bureau (CFPB) issued its final rule, the 2017 Payday, Vehicle Title, and Certain High-Cost Installment Loans Rule (Small Dollar Rule), which rescinded the ability to repay and underwriting provisions. The final rule does not, however, rescind or alter the payment provisions in the Small Dollar Rule, and the CFPB indicated that it would be moving forward with those provisions.
This webinar will provide an in-depth analysis of the payment provisions and the requirements for bank and non-bank lenders offering covered products. Specifically, we will discuss the compliance and operational considerations for processing consumer payments on covered loans. We will also discuss the impact of the recent federal inter-agency guidance for depository institutions offering small dollar loans and Madden fixes from the FDIC and OCC on the broader consumer finance marketplace.
- While the CFPB removed the ability-to-repay rules, the payment provisions remain
- Compliance with the payment provisions will require a strong compliance management system and a coordinated effort for incorporation into operations
- Due to the complexity of the payment provisions, it will be important to conduct effective training of all customer-facing personnel and detailed monitoring of any vendors involved in the new processes
- With new interagency federal guidance on depository banks working with third party innovative vendors and recent FDIC and OCC statements related to the Valid When Made Doctrine/Madden fix, the bank partnership model at the federal level is gaining momentum and we may see more small dollar lending from this model in the near future