On 7/7/2020, the CFPB issued a final rule on small dollar lending which rescinds the mandatory underwriting provisions of the 2017 rule but does not rescind or alter the payments provisions of the 2017 rule. In their release, the CFPB stated the following:
“Rescinding the mandatory underwriting provisions of the 2017 rule ensures that consumers have access to credit and competition in states that have decided to allow their residents to use such products, subject to state-law limitations. Currently, 32 states allow small dollar lending. Many of these states set maximum interest rates for small dollar loans or impose other restrictions or limitations on their use. As noted above, the Bureau adopted today’s rule because of the insufficient legal and evidentiary bases for the 2017 rule’s mandatory underwriting provisions, but also notes that today’s action will help to ensure the continued availability of small dollar lending products for consumers who demand them, including those who may have a particular need for such products as a result of the current pandemic.”
The CFPB release can be found here, an executive summary of the rule can be found here, and a set of FAQs can be found here.