Payday, Vehicle Title, and Certain High-Cost Installment Loans (withdrawal of ‘ability to pay,’ mandatory underwriting)


Payday, Vehicle Title, and Certain High-Cost Installment Loans

Subject: Payday lending
Agency: CFPB
Status: Final rule

The Bureau of Consumer Financial Protection (Bureau) is issuing this final rule to amend its regulations governing payday, vehicle title, and certain high-cost installment loans. Specifically, the Bureau is revoking provisions of those regulations that: provide that it is an unfair and abusive practice for a lender to make a covered short-term or longer-term balloon-payment loan, including payday and vehicle title loans, without reasonably determining that consumers have the ability to repay those loans according to their terms; prescribe mandatory underwriting requirements for making the ability-to-repay determination; exempt certain loans from the mandatory underwriting requirements; and establish related definitions, reporting, recordkeeping, and compliance date requirements. The Bureau is making these amendments to the regulations based on its re-evaluation of the legal and evidentiary bases for these provisions. 

Date proposed: Feb. 14, 2019
Comments due date:

May 15, 2019

Final rule effective date: Oct. 20, 2020
Rule compliance date:

Agency release: Consumer Financial Protection Bureau Issues Final Rule on Small Dollar Lending
Related Reg Report item(s):

Bureau drops ‘ability to repay’ provision from payday lending rule but keeps provisions blocking unapproved withdrawals