The CFPB’s pared down Payday Loan Rule finally went into effect on March 30, 2025. This article explains three surprising facts about the rule’s importance to consumer practitioners: the rule’s provisions offer significant protections, apply to many forms of high-cost lending, and the rule offers substantial assistance in private litigation involving not only overdraft and NSF fees, but also any litigation involving high-cost lenders.
High-Cost Credit
Supreme Court Reinvigorates State Law’s Applicability to Banks
A May 30 Supreme Court decision limits federal preemption of state laws affecting banks, with broad implications for consumer credit and banking litigation. This article explains the Supreme Court decision’s key takeaways and practice implications, and then lists state laws unlikely now to be preempted. The article also lists transactions where federal banking preemption never applies.
New Angles in Challenging Rent-a-Bank Schemes
Predatory lenders use rent-a-bank schemes to avoid the consumer’s home state usury limits by piggybacking onto federal rate exportation rights available only to banks. This article explains how banks and others participating in a rent-a-bank scheme could be in for a big surprise. They may not be immune from the consumer’s home state regulation of matters other than the actual interest rate, leading to powerful consumer remedies.