WASHINGTON–The Consumer Financial Protection Bureau (CFPB) has announced another rule it will no longer prioritize, in this case penalties or fines related to the payment withdrawal and payment disclosure provisions of the agency ‘s 2017 payday lending rules.

Those rules had been set to go into effect ton March 30.

In addition, the Bureau said it is “contemplating issuing a notice of proposed rulemaking to narrow the scope of the rule.”

In 2017 a  lawsuit was filed against the CFPB over the 2017 final rule by the Consumer Financial Services Association, which represents payday lenders. The FSA lost its case on appeal in 2022, and its remaining challenge, which targeted the CFPB’s funding mechanism, was rejected by the U.S. Supreme Court in 2024. 

In issuing its final rule, the CFPB said the rule includes penalty-fee prevention measures that apply to short-term loans, balloon-payment loans, and any loan with an annual percentage rate over 36% that includes authorization for the lender to access the borrower’s checking or prepaid account.

According to the bureau, the provisions will not apply to banks or credit unions making loans to their own customers (or members) “if those loans cannot generate overdraft or insufficient funds fees.”

The Provisions

Among the provisions:

• A requirement to provide written notice before the first attempt to debit the consumer’s account to collect payment for any loan covered by the rule.
• After two straight unsuccessful attempts, the lender is prohibited from debiting the account again unless the lender gets a new and specific authorization from the borrower to again debit the account. (An unsuccessful attempt includes a debit or withdrawal that is returned unpaid or is declined due to insufficient funds in the borrower’s account.)

Also Announced

In addition, the Bureau said that “with respect to the Payday, Vehicle Title, and Certain High-Cost Installment Loans Regulation, it will not “prioritize enforcement or supervision actions with regard to any penalties or fines associated with the Payment Withdrawal provisions and the Payment Disclosure provisions once they become operative on March 30, 2025.”

Instead, the CFPB said it will instead keep its enforcement and supervision resources “focused on pressing threats to consumers, particularly servicemen and veterans.”