b'For more information, please visit www.lenderlawwatch.com or www.enforcementwatch.com2019 HIGHLIGHTS of gross income and capping total installments to onlythat it failed to resolve in a timely manner. Per the con- remain subject to everchanging political winds, CFPB Further Delays Implementation of the Paydayfour payments. Fort Worth is now one of over 70 citiessent order, the payday lender will pay a $3.2 million civilparticularly in an election year, but support for this Lending Rule. As noted above, the Bureau formallyor municipalities in Texas to govern payday or short- money penalty to the CFPB. The lender is also subjectlegislation continues to broaden. Also, as noted in prior term lending.to injunctive relief prohibiting its alleged conduct. years, a decrease in the overall number of enforcement announced in June that it would delay the complianceFTC Reaches Settlement with Avant. In April the FTCactions does not necessarily signal a decrease in deadline for the mandatory underwriting provisions ofannounced that it had reached a settlement with Avant,LOOKING AHEAD TO 2020 attention to payday lending, as regulators continue to the Payday Lending Rule until November 2020. In No- an online lending company, for $3.85 million, resolvingpursue non-public investigations in this area. vember 2019, the Bureau released its revised Rulemak- allegations that the company had engaged in unfairIn 2020, watch for federal legislative action to expand ing Agenda and noted that it was continuing to reviewand deceptive loan servicing practices in violation ofconsumer lending protections like those in the MLA, the approximately 190,000 public comments receivedSection 5 of the FTC Act, 15 U.S.C.45, the TSR, 16such as interest rate caps, to all Americans. Efforts concerning the Rule before the comment period closedC.F.R. Part 310, and Section 913(1) of the EFTA, 15 U.S.C. in May 2019. The Bureau anticipates taking final action 1693k, and its implementing Regulation E, 12 C.F.R.by April 2020.1005.10. According to the FTC, the online lender al-Federal Agencies Continue to Encourage Institutionslegedly violated these provisions when it made unau-to Offer Short-Term, Small Dollar Loans. As the fed- thorized charges on customers accounts and requiredWHAT TO WATCHeral governments key watchdog relaxes its oversightthat borrowers make automatic payments from their of small-dollar lenders, other federal agencies contin- bank accounts. For example, the FTC claimed thatImplementation of the CFPBs Payday Lending Ruleue to encourage traditional banks, credit unions, andthe company had charged customers their monthlyPotential expansion of the MLA to all Americansnew non-traditional credit sources to offer short-term,payments twice or more in one month and refused toAdditional state legislation and rules governing small dollar loanssmall-dollar financial products. In September 2019, therefund such duplicate payments despite complaints. National Credit Union Administration (NCUA) approvedThe company also allegedly advertised that borrowers its final rule allowing national credit unions to offer morecould use credit or debit cards to make payments on of these products. Notably, the rule will allow Feder- installment loans offered on its website, when in fact al Credit Unions (FCUs) to offer loans for any amountconsumers were unable to do so. The Stipulated Order up to $2,000, set terms between one and 12 months,permanently enjoins the company from making false and extend credit immediately upon the borrowersrepresentations regarding its methods of payment, establishing membership, while also limiting FCUsfees, and payoff balances, and requires the company to from extending more than one such type of productpay $3.85 million in equitable relief, which will be used per customer at a time. This continues a broader trendfor consumer redress. The settlement also requires the across recent years moving additional players into thecompany to submit future compliance notices to the short-term, small-dollar lending space. In recent years,FTC.the OCC urged national banks and federal savings as- CFPB Enters Consent Order with Enova International, sociations to offer shorter, small-dollar installment loansInc. In January the CFPB announced it entered into a (following CFPB authorization to provide these types ofconsent order with Enova International, Inc., an online loans), and the FDIC requested public comment on is- lender that extends unsecured payday and installment sues related to small-dollar lending by FDIC-supervisedloans, as well as lines of credit, resolving allegations financial institutions.that the lender had engaged in unfair acts or practices Small-Dollar Loans Peak Interests of States and Mu- in violation of the CFPA, 12 U.S.C.5531, 5536. The nicipalities in 2019. The California legislature, whichconsent order alleges that although the consumers had governs one of the largest consumer lending marketsauthorized the lender to debit their bank accounts, the in the country, passed a bill in September that capslender instead debited different bank accounts without interest rates at 36% on all consumer loans greater thanauthorization by updating consumers bank account $2,500 and less than $10,000. In states such as Texas,numbers with more recent information the lender pur-where state-wide legislation governs online lending butchased from lead aggregators. The consent order also is less restrictive of traditional payday lending practic- asserts that the lender failed to honor loan extensions it es, municipalities have stepped in. The Fort Worth Cityhad provided to consumers because of a coding error Council released regulations limiting advances to 20% 32 33'