[Federal Register Volume 85, Number 134 (Monday, July 13, 2020)]
[Rules and Regulations]
[Pages 41905-41906]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-14937]
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BUREAU OF CONSUMER FINANCIAL PROTECTION
12 CFR Part 1041
Payday, Vehicle Title, and Certain High-Cost Installment Loans;
Ratification of Payment Provisions
AGENCY: Bureau of Consumer Financial Protection.
ACTION: Ratification.
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SUMMARY: The Bureau of Consumer Financial Protection (Bureau), through
its Director, is ratifying certain provisions of its November 17, 2017
rule regarding payday, vehicle title, and certain high-cost installment
loans.
DATES: This ratification is issued on July 13, 2020 and relates back to
the Rule published on November 17, 2017.
FOR FURTHER INFORMATION CONTACT: Christopher Shelton, Counsel, Legal
Division, at 202-435-7700. If you require this document in an
alternative electronic format, please contact
[email protected].
SUPPLEMENTARY INFORMATION:
I. Background
The Bureau was established by the Consumer Financial Protection Act
of 2010 (CFPA).\1\ Section 1011(c)(3) of the CFPA provided that the
President may remove the Director of the Bureau only for inefficiency,
neglect of duty, or malfeasance in office.\2\
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\1\ Public Law 111-203, title X, 124 Stat. 1376, 1955-2113
(2010).
\2\ 12 U.S.C. 5491(c)(3).
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The Bureau's rule regarding Payday, Vehicle Title, and Certain
High-Cost Loan Installments (2017 Final Rule or Rule) \3\ contained two
primary components: (1) Mandatory underwriting provisions requiring
lenders to assess borrowers' ability to repay before making covered
loans; \4\ and (2) payments provisions governing lenders' withdrawing
payments for covered loans from consumers' bank accounts.\5\
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\3\ 82 FR 54472 (Nov. 17, 2017).
\4\ 12 CFR 1041.4-1041.6, 1041.10, 1041.11, 1041.12(b)(1)-(3).
\5\ 12 CFR 1041.2, 1041.3, 1041.7-1041.9, 1041.12(a), (b)
introductory text, (b)(4)-(5), 1041.13.
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On June 29, 2020, the Supreme Court held in Seila Law LLC v. CFPB
that the CFPA's removal provision violates the separation of powers.\6\
The Court further held that ``the CFPB Director's removal protection is
severable from the other statutory provisions bearing on the CFPB's
authority. The agency may therefore continue to operate, but its
Director, in light of our decision, must be removable by the President
at will.'' \7\ ``The only constitutional defect we have identified in
the CFPB's structure is the Director's insulation from removal.'' \8\
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\6\ 591 U.S.--(2020) (slip op.).
\7\ Id. at 3.
\8\ Id. at 32.
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The Bureau is separately issuing a rule that rescinds the mandatory
underwriting provisions of the 2017 Final Rule. That rule does not
affect the separate payments provisions, and this ratification is
independent of that rule.
II. Ratification
The Bureau, through its Director, hereby affirms and ratifies the
payment provisions \9\ of the 2017 Final Rule.
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\9\ 12 CFR 1041.2, 1041.3, 1041.7-1041.9, 1041.12(a), (b)
introductory text, (b)(4)-(5), 1041.13.
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[[Page 41906]]
The Bureau's Director is familiar with the payment provisions and
has also conducted a further evaluation of them for purposes of this
ratification. Based on the Director's evaluation of the payment
provisions, it is the Director's considered judgment that they should
be ratified.\10\
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\10\ In ratifying the payment provisions, the Bureau ratifies
the procedural steps that were necessary to issue the payment
provisions, including the decision to propose the payment provisions
for public comment. See 81 FR 47863 (proposed July 22, 2016).
Dated: July 7, 2020.
Kathleen L. Kraninger,
Director, Bureau of Consumer Financial Protection.
[FR Doc. 2020-14937 Filed 7-10-20; 8:45 am]
BILLING CODE 4810-AM-P