An interagency notice meant to encourage lenders to offer small consumer loans also provides federal agencies too much say on what constitutes “reasonable” pricing.
The congressional showdown over the pace of rulemaking during the pandemic is a hardening of older positions on banking policy ahead of the 2020 elections, observers said.
The templates are meant to make it easier to obtain agency approval for small-dollar loan products and to accommodate mortgage servicers that want to provide online loss mitigation options.
A Democratic measure to freeze foreclosures and auto repossessions through the coronavirus crisis while expanding eligibility for loan forbearance is getting strong pushback from banks and credit unions, which complain it would constrain credit.
Payday Loan LLC, which engages in lending and check cashing in 22 stores in California, sued the SBA on April 25 after its request for a $644,000 loan from the Paycheck Protection Program was denied.
Consumer groups are poised to take the bureau to court over its gutting of underwriting requirements, while House Democratic leaders could attempt a repeal through the Congressional Review Act.
A former economist says high-ranking officials engaged in “legally risky” behavior to downplay consumer harm; online payments and contactless transactions jumped in the first quarter, and some think the new habits will stick.
The agency has relaxed some reporting requirements and joined other regulators in encouraging banks to help borrowers, but pressure is building on the bureau to do more to aid consumers suffering financial hardship.