AUSTIN, Texas–U.S. District Court Judge Lee Yeakel has denied a request by Mick Mulvaney, acting director of the BCFP, to delay the effective date of new rules around payday loans.
Those rules are set to go into effect next year.
Consumer groups have praised the ruling, calling it a “win for consumers” as it reduces the likelihood a borrower will be caught in a trap of growing debt.
The payday, or small-dollar, loan rule was finalized in October of 2017 under former BCFP Director Richard Cordray. It requires lenders to determine a borrower's ability to repay a short-term loan of 45 days or less.
Reaction to the rule by credit unions and others can be found here.
The judge’s ruling came in response to a lawsuit filed by two payday lending trade groups, the Community Financial Services Association of America and Consumer Service Alliance of Texas.