Judge Again Denies Request to Delay CFPB Payday Rules

A federal judge again has denied a request by the CFPB and an association representing payday lenders to delay the Aug. 19, 2019 effective date of the agency’s controversial payday lending rules.

In issuing the ruling, U.S. District Judge Lee Yeakel of the Western District of Texas sided with consumer groups that opposed the delay.

The Community Financial Services Association of America filed suit in April challenging the agency’s rule, which was issued by former agency Director Richard Cordray, an Obama Administration appointee.

The agency, now run by Trump Administration Acting Director Mick Mulvaney sided with the association, saying that the CFPB is revisiting the rules. The agency is widely expected to repeal or significantly weaken the rule.

As a result, the CFPB asked that the lawsuit and the rules be delayed. Yeakel agreed to stay proceedings in the lawsuit but denied a request to delay the rule’s effective date.

Yeakel said that the rule’s effective date was not approaching and sided with the consumer groups.

Those groups, including the Center for Responsible Lending and Americans for Financial Reform, argued that the CFPB and the payday lending groups were trying to circumvent the rulemaking process by asking the judge to delay the rules.

“If the agency is unhappy with its own lawfully promulgated rule, [federal law] sets forth the procedures for issuing a new or revised regulation,” they said.

In its Spring version of its regulatory agenda, the CFPB estimated that it will issue new proposed rules in February 2019.