A bipartisan group of House members on Friday introduced a resolution to nullify the CFPB’s payday lending rules.
The rules, issued in October, but only published on Nov. 17, would crack down on an industry that critics contend charge exorbitant interest rates and fees—trapping borrowers into a spiral of debt.
However, the final rules also carved out an exemption for credit unions making loans based on the NCUA’s Payday Alternative Loan Program. Credit union trade groups said the final rules were much better than the proposed rules.
The rules were issued under former CFPB Director Richard Cordray’s administration. Te agency is now run by Office of Management and Budget Director Mick Mulvaney, who, as a House member, wanted to delay the payday rules.
The House members said that access to short-term, small-dollar loans is essential to nearly 12 million consumers who have trouble getting traditional loans.
House Financial Services Committee Chairman Jeb Hensarling (R-Texas), a supporter of the effort to nullify the rule said it is an example of how “unelected, unaccountable government bureaucracy hurts working people.”
The House members introduced their resolution under the Congressional Review Act, which allows Congress to nullify rules within a set period of time. The resolution cannot be filibustered in the Senate.
The bill is sponsored by Rep. Dennis Ross (R-Fl.) and co-sponsored by Reps. Alcee Hastings (D-Fl.), Tom Graves (R-Ga.), Henry Cuellar (D-Tx.), Steve Stivers (R-Ohio) and Collin Peterson (D-Minn.).
“More than 1.2 million Floridians per year rely on Florida’s carefully regulated small-dollar lending industry to make ends meet”, Ross said. “The CFPB’s small dollar lending rule isn’t reasonable regulation — it’s a de facto ban on what these Floridians need.”