July 08, 2020

STATEMENT FROM DFS SUPERINTENDENT LINDA A. LACEWELL ON CFPB’S FINAL RULE RESCINDING CONSUMER PROTECTIONS WITH RESPECT TO PAYDAY LOANS

“Yesterday, the Consumer Financial Protection Bureau rescinded common-sense underwriting requirements that were meant to ensure that borrowers have an ability to repay their short term, small dollar loans, and stop the cycle of debt that so many consumers fall into when they need emergency funds.  This decision is a giveaway to predatory lenders and flies in the face of five years of research conducted by the CFPB before it enacted the underwriting protections in 2017. Regrettably and inappropriately, the CFPB has used the current health and economic crisis as a cover and justification for rescinding prudent underwriting requirements, thereby sanctioning and enabling predatory lending practices and prioritizing them over consumer protection in total disregard of its mandate.  However, we at DFS will continue to protect consumers from predatory lending using all of the tools at our disposal.”

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