• CFPB Issues Final Rule On Short - Term Loans
  • December 11, 2017 | Author: Edward A. Wilmesherr
  • Law Firm: Butler Snow LLP - Ridgeland Office
  • On October 5, 2017, the CFPB issued a final rule (the ”Rule”) imposing limitation on (1) short-term consumer loans, (2) longer-term consumer installment loans with balloon payments, and (3) higher-rate consumer installment loans repayable by a payment authorization. The Rule requires lenders originating short-term loans and longer-term balloon payment loan to evaluate whether each consumer has the ability to repay the loan along with current obligations and expenditures. The Rule provides an alternative loan for lenders who want to avoid the ability to repay determination. The Rule curtails repeated unsuccessful attempts to debit a consumer's account for short-term loans, balloon payment loans, and installment loans that involve a payment authorization and an APR over 36%.