The official told lawmakers Thursday that the research underlying the bureau's 2017 payday rule proposal did not support strict underwriting requirements of small-dollar loans.
The proposed rollback of underwriting requirements for small-dollar lenders could redefine a legal doctrine that governs rules affecting other companies as well.
In a major victory for small-dollar lenders, the agency plans to rescind underwriting requirements that were the centerpiece of the rule drafted by a Democratic appointee.
When a Columbia University professor surveyed 1,000 payday loan customers, little did he know that the resulting research report would become a lightning rod in the drafting of rules for small-dollar lenders.
The agency is expected soon to propose a revamp of the 2017 regulation that would eliminate the ability-to-repay provisions, which small-dollar lenders saw as a direct threat to their business.
The bank will pay over $15 million in restitution and fines to settle claims that it neglected stop-payment requests and reopened deposit accounts without customers' consent.
The CFPB ordered Village Capital & Investment in Henderson, Nev., to issue refunds and pay a penalty for allegedly misrepresenting the cost savings in a refi product.
