October 13, 2017

On October 5th, the Consumer Finance Protection Bureau (CFPB) issued its final rule to crack down on payday and auto title lending practices across the country. Specifically, the rule seeks to safeguard consumers from taking on debt they cannot afford by:

  • Requiring lenders to determine a consumer’s ability to pay before providing a loan
  • Limiting repeat-borrowing for certain short-term loans
  • Authorizing less-risky long-term lending options as a substitute for traditional payday and auto title loans
  • Requiring lenders to give consumers written notice before debiting their bank account for payment, and requiring consumer’s permission after two failed attempts to debit the consumer’s bank account

The rule will not go into effect for 21 months, and even then only if it survives the expected legal and political challenges from supporters of the payday industry. More details on the CFPB’s final rule, including the text of the rule itself, can be found on the Consumer Financial Protection Bureau website. Additionally, this article from the New York Times provides a good overview of the reaction to the CFPB’s final rule.

September 27, 2017

On September 21st, a Travis County Court issued two opinions reversing the City of Austin municipal court orders that Austin’s payday and auto-title lending ordinance was preempted by state statute. The court held that the city’s ordinance is not preempted by state law because there is a reasonable construction by which the ordinance and state statute governing credit access businesses can both be given effect.

The two opinions can be read online:

March 8, 2017

On March 1st, a City of Austin municipal court judge issued orders in two cases declaring the city’s payday lending ordinance to be preempted by state law. The City of Austin has indicated that it will appeal the two decisions. View the orders:

January 25, 2017

On January 24th, researchers from the University of Utah and University of New Mexico released a report after an 18-month study of city approaches to controlling payday lending practices. The report concludes that there are ten lessons to assist others interested in pursuing and adopting ordinances regulating payday lending. The researchers based their conclusions, in part, on the experiences of Dallas and other Texas cities that have adopted ordinances related to payday lending. Read the full report (PDF).