News Flash: AG’s Oppose Payday Loan Delay

March 20, 2019 at 9:39 am Leave a comment

It’s a given these days. Attorneys General from the party opposite of the sitting President varnish their ideological bona fidas – not to mention get press attention – by framing just about any high level policy dispute as a legal issue and threatening to sue.

The latest example of this pavlovian response comes in the form of this comment letter penned by California Attorney General Xavier Becerra and signed by 25 AG’s including New York’s Letitia James. As I’ve been blogging about a lot lately, the CFPB’s payday loan regulations, require among other things that lenders underwrite payday loans to ensure that borrowers have the ability to repay them. This provision is scheduled to take effect in August. CUNA recently issued a letter supporting the delay. In their letter, the AG’s not only criticize the proposed extension but go so far as to suggest that the Bureau might be violating the Administrative Procedures Act. Of course they conclude by explaining that if the “CFPB finalizes the Proposed Delay Rule, we will closely examine whether to take action to address any unlawful action by CFPB.” Dear God, lawyers may sue.

This is the type of Argument that appeals to lawyers but makes the rest of the world so annoyed with us. Let’s say the Attorney Generals are correct? Do they really think it is in anyone’s interest to implement regulations even as the CFPB is proposing another round of rulemaking that would gut the underwriting requirements? And remember, the same group of people who defended the creation of a benign dictator for consumer finance can’t seriously be suggesting that the CFPB lacks the ability to amend its own regulations.

There certainly are some good arguments for and  against regulating payday loans. My only point is let’s keep the policy debates where they belong. Just as I am concerned that the regulatory process needs to be scaled back so that more issues are decided by elected representatives. I also believe that the knee jerk response to frame every policy dispute is a legal issue to be decided on by unelected judges. ultimately distorts the legal system and distracts us from the hard work of reaching a consensus on difficult issues.

Is Congress Ready To Act On Cannabis Banking?

Your faithful blogger has consistently predicted that one of the few issues you would see substantial movement on during this congressional session is on cannabis banking. Since so many of my predictions have proven to be, shall we say off target, I am proud to report this morning that the House Financial Services Committee will be holding a meeting on March 26th to markup HR 1595 by Congressman Perlmutter which, “would create protections for depository institutions that provide financial services to cannabis-related legitimate businesses and service providers for such businesses, and for other purposes.”

Meanwhile, back at the ranch, we received word yesterday that New York Senate Banks Committee Chairman James Sanders Jr. and Senate Finance Committee Chairman Liz Krueger will be holding a public discussion of banking issues related to marijuana banking on April 9th.

Enjoy the nice weather today. See you tomorrow.

Entry filed under: Legal Watch, New York State. Tags: , , .

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Authored By:

Henry Meier, Esq., Senior Vice President, General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association. In addition, although Henry strives to give his readers useful and accurate information on a broad range of subjects, many of which involve legal disputes, his views are not a substitute for legal advise from retained counsel.

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