On Jan. 10, 2025, CFPB issued blog post reminding of Mar. 30, 2025 deadline for compliance with requirements for collections of money from borrowers’ accounts.
On Jun. 14, CFPB reported effective date of payday lending rule.
CFPB reported new protections under payday lending rule go into effect Mar. 30, 2025.
Rule prohibits unfair, abusive practice in payday, installment lending, insufficient funsd.
Initially set to take effect in 2019, Rule was delayed due to litigation, see #212393.
Payday Lending Rule
Rule seeks to protect consumers from junk fees charged for nonsufficient funds.
Provides that after two tries to withdraw money from an account have failed, covered lenders cannot try again unless the borrower specifically authorizes another attempt.
Requires lenders to give consumers certain notices re withdrawals, consumer’s rights.
Litigation
Rule originally set to take effect in 2019 but was delayed by litigation brought by the payday lender lobby; sought to block rule arguing against its fairness, CFPB authority.
In 2022, court of appeals rejected most of payday lenders’ claims, upheld CFPB finding that the prohibited practice was unfair, affirmed rule's reasonableness, see #151281.
In May 2024, the Supreme Court issued a decision in CFPB v. CFSA rejecting the payday lenders’ sole remaining claim, pertaining to the CFPB funding, see #212393.
Effectiveness
Existing court order pausing the rule is set to expire 286 days after the US Supreme Court judgment is entered in the payday lenders' case, expected on Jun. 17, 2024.
Therefore, the rule is expected to become effective on Mar. 30, 2025.
Jan. 2025 CFPB Effectiveness
On Jan. 10, 2025, CFPB issued blog post reminding of Mar. 30, 2025 deadline for compliance with requirements for collections of money from borrowers’ accounts.
