In a blog post published on January 10, the CFPB announced that its 2017 payday lending rule would go into effect on March 30 after conclusion of litigation regarding the rule, which sought to block implementation of the rule. Starting on March 30, payday and installment lenders with covered loans must adhere to new requirements limiting their ability to collect payments from borrowers’ accounts in connection with covered loans. As previously covered by InfoBytes, the rule prohibits lenders from making more than two unsuccessful attempts to withdraw money from a borrower’s account unless the borrower specifically authorizes another attempt. According to the CFPB, the rule is intended to address lenders’ practice of making repeated attempts to withdraw funds from an account to pay off the loan, which can trigger additional fees for borrowers.
