Consumers Union applauds the Bureau for taking this historic step to set national minimum standards for a range of high-cost loans that have posed well-documented risks to consumers for many years. We are encouraged that the proposed rule:
- Adopts ability-to-repay as a general principle throughout the rule;
- Limits repeated debit attempts on consumers’ accounts;
- Covers both shorter- and longer-term loans; and
- Acknowledges the importance of stronger state laws.
However, we have concerns that the rule would exempt lenders from crucial underwriting requirements in certain circumstances, and believe that the Bureau should do more to ensure that lenders can no longer engage in the kinds of risky practices that put consumers into cycles of abusive debt. We urge the Bureau to strengthen the final rule in the following ways:
- Apply the rule to all loans where the lender obtains vehicle title or bank account access at any time, or where the lender retains the right to seize property or garnish wages;
- Apply a robust ability-to-repay requirement, without exception;
- Allow only one unsuccessful debit attempt before obtaining reauthorization from a consumer; and
- Strengthen the enforceability of stronger state laws.