The Administration claims that the CFPB will have to shut down next year because it can’t ask the Federal Reserve for funds if the CFPB decides that the Federal Reserve isn’t operating at a profit (a claim being challenged in 3 different actions currently pending in federal district courts in California and the District of Columbia). But since you need an operating agency to deregulate predatory financial products, that means the CFPB is rushing stuff out in time for the holidays. In today’s move, the agency released an advisory opinion to be published in tomorrow’s federal register, stating that “paycheck advance” or “earned wage access” products — which allow employees to borrow against wages they have earned but not been paid — are not actually loans, and thus that the minimal disclosure and truthfulness requirements of the Truth in Lending Act do not apply.
NCLC’s statement, pointing out the dangerousness of these products and that courts have not agreed with the CFPB’s new interpretation, is here.
Bah humbug.
