A bipartisan group of House legislators has introduced a Congressional Review Act resolution to bar passage of the final payday lending rule from the Consumer Financial Protection Bureau.
The resolution was sponsored by Reps. Henry Cueller (D-Texas), Tom Graves (D-Ga.), Alcee Hastings (D-Fla.), Collin Peterson (D-Minn.), Dennis Ross (R-Fla.) and Steve Stivers (R-Ohio). The Congressional Review Act gives Congress 60 session days to nullify a regulation via a majority vote.
“While we all support safeguards to prevent predatory lending practices, the CFPB’s rule on small-dollar loans will actually hurt the very people it intends to help – a familiar pattern with the CFPB,” Graves said. “Under this rule, many low-income consumers with a limited credit history will face little, if any, access to cash during an emergency because the rule will push lenders out of the marketplace.”
“Right now, small-dollar loans are effectively regulated at the state level,” Graves continued. “There is no reason to make a change simply because an unaccountable Washington agency thinks consumers will benefit from a top-down, one-size-fits-all regulation.”
The bureau’s payday lending rule was finalized in October, published in the Federal Register on Nov. 17, and goes into effect Jan. 16, 2018. It requires payday lenders to determine upfront whether or not the consumer is capable of repaying the loan. The rule also curtails lenders’ repeated attempts to debit payments from a borrower’s bank account, “a practice that racks up fees and can lead to account closure,” the bureau said.
Interim CFPB Director Mick Mulvaney, a former congressman for South Carolina, announced his support for the resolution. Congress “is the more appropriate place…to handle it through,” Mulvaney said.
Mulvaney has been involved in a tussle for temporary control of the CFPB until President Donald Trump can appoint a permanent replacement for outgoing former Director Richard Cordray, who announced a bid for governor of Ohio Dec. 5.
Cordray appointed former chief of staff Leandra English to run the bureau as acting director when he resigned Nov. 24, but Trump appointed Mulvaney a few hours later. English’s initial lawsuit attempting to block Mulvaney’s appointment was denied, but she could pursue a second attempt.