Report finds that payday lenders circumvent state laws

On June 16, the House Financial Services Committee Democratic staff released a report emphasizing the need for strong and effective federal regulations and consumer protections. The report, which is titled “Skirting the Law: Five Tactics Payday Lenders Use to Evade State Consumer Protection Laws,” gives credence to arguments that state-level regulation of the payday and small-dollar lending industry fails to provide sufficient protections for consumers. The report highlights various tactics that lenders employs to circumvent state laws. Specifically, the report offers several examples of measures lenders have taken to avoid compliance with state regulations: 

House Subcommittee Questions CFPB’s Arbitration Rule

On Wednesday, May 18, the House Financial Institutions and Consumer Credit Subcommittee held a hearing entitled, “Examining the CFPB’s Proposed Rulemaking on Arbitration: Is it in the Public Interest and for the Protection of Consumers?” The hearing follows the release of Consumer Financial Protection Bureau’s (CFPB) Notice of Proposed Rulemaking covering the use of arbitration agreements containing class action waivers in consumer financial services contracts on May 5, 2016.

Google bans payday lender ads

On May 11, Google announced that it will no longer accept ads promoting payday, auto title or other high cost installment loans that require repayment within 60 days from the date the loan is issued. The change to the Google AdWords policy also includes a ban on paid advertisements for high-interest loans with an annual percentage rate of 36% or greater.