Consumer Group Asks Court to Revive Tougher Payday Lending Rules

The Consumer Financial Protection Bureau used improper evidentiary standards and disregarded harm to borrowers when it scaled back restrictions on the payday lending industry, consumer advocates said in a lawsuit.

The bureau’s removal of borrower ability-to-repay standards during its rewrite of 2017 payday lending regulations violated the Administrative Procedure Act, the National Association for Latino Community Asset Builders said in a complaint filed Thursday. The suit asks the U.S. District Court for the District of Columbia to nullify new rules issued July 7 and to reinstate the 2017 regulations.

The borrower ability-to-repay requirements—loan underwriting, income verification, and “cooling-off” periods between ...