The CFPB’s original proposal established limitations for a “covered loan” which could be either a short-term consumer loan with a term of 45 days or less or a loan with a term of more than 45 days where the total cost of credit exceeds an annual rate of 36 percent along with other qualifications.
According to reports, the final rule, which is in review by other agencies, will only cover short-terms loans with a term of less than 45 days. The review is expected to be finalized in early September, according to reports.
Hensarling wrote to Cordray asking about his motives behind the reported rush to finalize the CFPB’s payday lending rule. He also asked about his future at the bureau, amidst speculation that he is going to resign and run for governor in Ohio.
The Texas congressman asked Cordray to deny that political considerations have informed any decisions, orders and communications relating to the payday lending rule; assure him that all records relating to the rulemaking will be preserved; and confirm that Cordray will serve his full term as CFPB director, or otherwise provide the date on which he will resign from office. Hensarling asked for a reply to those statements in writing this week.
The National Association of Federally Insured Credit Unions also expressed concern about CFPB’s proposed payday lending rule. It said the rule could impede consumer access to credit and have a particularly negative impact on the credit union industry, as it would affect almost all covered loan products provided by many institutions.