But Will It Matter?
A key consumer protection may be allowed to stand - but no one may be around to enforce it
Adam Rust of the Consumer Federation of America offers some potentially encouraging news in a world that is basically chaos.
While just today, the Senate voted to rescind the CFPB’s rule capping overdraft fees at $5, another CFPB rule protecting borrowers using payday and installment loans may be left alone.
Rust:
Barring a last-minute action by the CFPB or a court intervention, the payment provision in the Consumer Financial Protection Bureau’s (CFPB) Payday Lending Rule will go into effect on March 30th.
What it means:
This provision addressed a widespread problem of payday lending: many payday lenders debit an account repeatedly, knowing that customers would incur overdraft fees, as a means to coerce repayment. Some payday lenders used the threat of overdraft and non-sufficient funds fees as an intimidation tactic to collect outstanding loan balances. In some cases, they even attempted to debit accounts that had been closed. Pew research revealed that more than one in four payday loan customers experienced an overdraft fee due to a lender’s attempt to collect a payment from their bank account. The CFPB identified one lender that debited a borrower’s account 11 times in a single day.
If this rule stands, it represents a huge win for consumers.
However, it begs the question: Who will enforce it?
Elon and Team Oligarchy have neutered CFPB.
And, while a court ruled that simply firing a number of CFPB employees violated the law, those employees returning to work have been directed to stop enforcement action. In fact, some say they’ve been told to just stay home and no longer have access to their government-issued computers.
So, a nice win (potentially) for consumers with the payment rule. And a big question about who will make it matter.
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While the CFPB may not be at full strength, you can take action in your state if you have a consumer protection concern.
First, start with your state’s Attorney General.
Attorneys General typically have consumer protection divisions and can apply relevant state laws to your situation. Sometimes, if an AG asks, a company will answer.
Second, let your Member of Congress know. One, they may be able to assist with a resolution. But also, it is important for Congress to know their constituents value the work formerly performed by CFPB. Congress can rescue the consumer champion from the DOGE Death Star . . . if they want to.