“Future of Small Dollar Lending”
The regulatory stars are aligning for banks and non-banks to expand their offerings of short-term, small dollar credit. A Federal district court judge this week dealt a blow to the industry and Mick Mulvaney’s Bureau of Consumer Financial Protection (Bureau) by refusing to stay the August 2019 compliance date for the agency’s payday rule. Notwithstanding this ruling, however, the Bureau and Federal banking agencies are primed for collaboration to reverse the Obama administration’s discouragement of short-term, high-interest lending. Alert lenders have the opportunity to expand their share of this market with little fear of prescriptive regulations–provided they are vigilant in their business practices to avoid the remaining threat posed by State authorities and private litigants, as well as the Federal Trade Commission (FTC) and the Department of Justice (DOJ).
This Stroock Special Bulletin addresses some of the key points from this ruling.