Credit unions are on notice: The federal consumer financial protection agency has delayed for 15 months the mandatory underwriting provisions’ compliance date for its rule on “payday lending,” the federal regulator stated in a letter sent Monday to institutions under its supervision.
The National Credit Union Administration (NCUA) issued a “consumer financial protection update” Monday advising credit unions of the compliance date delay by the Consumer Financial Protection Bureau (CFPB). The consumer bureau, earlier this month, instituted the delay in a final rule for its Payday, Vehicle Title, and Certain High-Cost Installment Loans Rule. The compliance date was reset to Nov. 19, 2020. The compliance date had been set to take effect Aug. 19 of this year.
The consumer bureau has indicated that it will use the time of the delay to reconsider the underwriting provisions, saying earlier this month that the delay would permit an “orderly conclusion” to its separate rulemaking process to reconsider the provisions.
CFPB said, when approving the final rule establishing the compliance delay, that there were two reasons it was acting:
- The agency has strong reasons to revisit the mandatory underwriting provisions, based on review of comments received in response to a notice of proposed rulemaking issued in February.
- If the mandatory underwriting provisions went into effect while CFPB was in the process of reconsidering the provisions, “consequences would likely follow—some of which may be irreversible even if the Mandatory Underwriting Provisions were later rescinded—that the Bureau believes may prove unwarranted and may undermine effective reconsideration of the 2017 Final Rule.”