On October 5, 2017 the Consumer Financial Protection Bureau’s (CFPB) published Regulation OO to implement the Payday, Vehicle Title, and Certain High-Cost Installment Loans Rule (Payday Loan Rule). The final rule was effective on October 20, 2020; however, the Payment Provisions were stayed by a court order. On August 31, 2021, the U.S. District Court for the Western District of Texas, granted the Consumer Financial Protections Bureau’s (CFPB) motion for summary judgment in Community Financial Services Association of America, Ltd., Consumer Service Alliance of Texas v. Consumer Financial Protection Bureau [and its Director], and ordered that the compliance date of the “Payday, Vehicle Title, and Certain High-Cost Installment Loans” Rule (12 CFR Part 1041) be stayed until 286 days after the date of the court’s order, June 13, 2022. Subsequently the plaintiffs appealed the ruling. During October 2021 the court extended the effective date until 286 days after the appeal is settled.
Most depository institutions do not originate large volumes of “covered loans”. For those with limited covered loans, it is reasonable to tweak the product line-up to avoid the massive new rules. How do you evade the requirements of a regulation that contains two separate requirements (Sections 1041.5(e) and .13) that prohibit evasion? That is one of the many questions answered in this program.