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September 7, 2021

Federal Court Upholds Important Consumer Protections in CFPB Payday Lending Rule, But More Needs to be Done

Tuesday, September 7, 2021
Contact: Evelyn Swan at 202-618-6433 or

WASHINGTON, D.C. — Today, Stephen W. Hall, Legal Director and Securities Specialist for Better Markets, released the following statement on the U.S. District Court for the Western District of Texas’s recently issued decision to uphold the payment provisions in the Consumer Financial Protection Bureau’s (CFPB) 2017 rule on payday lending:

“We welcome the decision of the federal district court in Texas upholding the CFPB’s payment provisions in the payday lending rule.  The rule will help protect countless consumers—especially the economically disadvantaged who are often forced to rely on payday loans—from predatory practices, including excessive attempts to extract money from borrowers’ accounts.  That practice unfairly burdens borrowers as fees pile up for returned payments and insufficient funds, which can lead to account closures and painful financial distress.  In reaching its decision, the court rightly rejected the onslaught of constitutional and other legal arguments advanced by the industry, which is desperate to preserve as much of its predatory business model as possible.

“While it is good news that those provisions were upheld, the CFPB simply must do more to protect our most vulnerable neighbors from despicable predatory practices by payday lenders.  Specifically, as we have advocated before, the CFPB must reinstate the other core protection that was in the original rule but stripped out in 2020.  Known as the underwriting requirement, it would make it an unfair and abusive practice for lenders to make loans without reasonably determining that consumers have the ability to repay the loans according to their terms.  Without this common-sense provision, payday lenders can more easily trap borrowers in endless cycles of debt with mountains of fees and sky-high interest payments — modern-day debtors’ prisons.”  


Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies – including many in finance – to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit

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