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March 29, 2019

Even If You Can’t Pay, Payday Lenders Can Keep Looting Your Account Thanks to Texas Judge

As if it wasn’t enough that new CFPB Director Kathy Kraninger was doing her best to help predatory payday lenders, a federal judge in Texas decided to leave in place a stay on the compliance date of the payday lending rule.

As a result of a ruling by U.S. District Judge Lee Yeakel, payday lenders will be able to continue to attempt to debit payments from a borrower’s bank account.

The reason for his ruling?  The CFPB failed to act and file a motion to lift the deadline.  In other words, it once again failed to take action to protect consumers from financial predators.

The proposed delay was the subject of a comment letter filed by Better Markets with the CFPB in which we state that the proposal “on its face lacks a sufficiently detailed and persuasive justification for such a significant change” and that it “it rests on the outcome of a related but hopelessly flawed Rescission

Proposal that by its own admission lacks a substantive foundation.”  This is a reference to the fact that the CFPB’s decision to reverse the payday lending rule was based on research paid for, supplied by, and drafted by industry, as we wrote about.

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