20 PAYDAY/SMALL DOLLAR LENDING In 2017, Goodwin monitored 26 federal and state enforcement actions related to payday and small- dollar personal loans (compared with 30 such actions in 2016). 2017 also saw significant regulatory developments affecting the small dollar lending industry, including the CFPB’s implementation of the payday lending rule in October. Federal and state agencies pursued lawsuits and settlements concerning allegedly illegal or usurious interest rates, deceptive lending and debt collection practices, and tribal affiliations—resulting in total settlement payments by financial entities of over $95 million. KEY TRENDS In October, the CFPB issued its final rule regulating payday lending. For the past five years, the CFPB had been researching and seeking comments from the industry on how to address its concerns with what it calls “lending traps” associated with small-dollar lending. Following this process, it finalized a rule, which, most significantly, would require lenders to determine a borrower’s ability to repay various types of small-dollar loans, including covered payday loans, auto title loans, deposit advance products, and longer-term loans with balloon payments. However, in January 2018, the CFPB announced that it intended to reopen the rulemaking process and reconsider the payday lending rule. Given that CFPB Director Mulvaney is a known opponent of the rule, its status is in doubt. Throughout 2017, federal and state agencies directed their enforcement attention to online payday lenders having affiliations with tribal or out-of-state banks in order to lend in states in which they were unlicensed or where their loans would otherwise exceed maximum APR. Several state attorneys general settled lawsuits brought in 2016 where they alleged that this practice was an unlawful attempt to avoid state usury and licensing laws. 2017 HIGHLIGHTS CFPB Issues Final Rule on Small-Dollar Lending. In October, the CFPB issued its final rule regulating payday lending, 12 CFR Part 1041. However, the CFPB, under the leadership of Director Mulvaney, announced in January 2018 that it was reopening the rulemaking process and reconsidering the previously final rule. As written, the Rule would require lenders to assess a borrower’s ability to repay “covered” small-dollar loans. Covered payday loans would have a repayment term of less than 45 days and require borrowers to either post-date a check for the full balance, including fees, or allow lenders to directly debit a borrower’s