CFPB Final Payday Rule - New Requirements for Short-Term, Auto-Title, and Other Covered Loans
1 hour 30 minutes
Gain an understanding of the new requirements set out in the CFPB final Payday Rule.
Short-term loans, as well as longer-term loans with certain characteristics (such as loans with rates over 36% per year or large balloon payments), are a critical part of the lending market and provide many consumers with necessary access to funds. These types of loans, however, are now the subject of an aggressive new ‘Payday Rule' recently finalized by the Consumer Financial Protection Bureau. The Payday Rule places strict new requirements on industry participants offering covered loans, including requirements for determining borrowers' ability to repay, limitations on and additional requirements for initiating payment transfers and withdrawals, and detailed compliance and recordkeeping requirements. This topic will help industry participants identify whether their loans are implicated by the Payday Rule and, if so, what specific requirements must now be met. This material will also assist participants in developing a compliance program prior to the Rule's forthcoming effective dates. Failing to do so may have significant repercussions both in terms of government enforcement and private litigation risk, which will also be highlighted throughout the content, with best compliance practices identified to avoid such risk. This information is critical for any lenders who offer covered loans or are considering offering covered loans, and will assist them in charting a course for compliance in advance of the various effective dates for different Rule requirements and in light of the uncertainties surrounding the Rule as a result of the change in leadership at the CFPB, among other recent events.
- You will be able to describe the new CFPB Rule governing short-term loans, auto-title loans, and longer-term loans with balloon payments, including the ability to repay requirements for underwriting such loans.
- You will be able to explain the new requirements governing lenders' ability to directly access and withdraw loan payments from consumers' bank accounts for loans within the scope of the new Rule.
- You will be able to explain the new requirements lenders must satisfy with respect to implementing compliance programs, training, and monitoring, as well as information furnishing and recordkeeping.
- You will be able to recognize potential areas of litigation and government enforcement risk for lenders providing consumers with short-term/payday loans, auto-title loans, and longer-term loans with balloon payments, etc.
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