OVERNIGHT REGULATION: Feds outline payday loan rules

Welcome to OVERNIGHT REGULATION, your daily rundown of news from Capitol Hill and beyond. It's Thursday evening here in Washington and we're busy catching lawmakers before they all leave town for two weeks.

But before we call it quits for the day, here's the latest:



The Consumer Financial Protection Bureau released a framework for the payday loan rules under consideration.

Director Richard Cordray said CFPB is considering allowing the payday lenders to choose between two sets of rules - debt trap prevention and debt trap protection.


The debt trap prevention rules would force lenders to verify a lender's ability to repay a loan up front and force lenders to give borrowers taking out consecutive loans a 60-day cooling off period.

But advocacy groups and lawmakers say they are concerned with loopholes in the proposal.  

Under the rules, a lender could waive the 60-day cooling off period after the first and second loans if a borrower proves they've had a change in circumstances that would make the new loan affordable. After three consecutive loans, however, there would be no exception.

If a lender chooses to follow the debt trap protection rules, CFPB said they would not be required to do an upfront analysis of a borrower's ability to repay a loan.

For borrowers wanting to rollover a loan, CFPB is deciding whether the debt protection rules would require a lender to structure the loans so a borrower is paying down the principal or make lenders switch borrowers to a no-cost extended payment plan after the third loan.

The rules would require all loans to be limited to $500 with one finance charge, prohibit a lender from holding a car title as collateral, include a 60-day cooling off period for three consecutive loans and cap how long a consumer can be in debt in a 12-month period at 90 days.

National People's Action called the proposal a major step forward in protecting families and their hard-earned money, but said it gives predatory lenders, which have a track record of abuse, the ability to chose how they're regulated.  

"This combined with an option that allows up to three back-to-back loans with triple-digit interest rates and no underwriting standards are loopholes more than large enough for predators to waltz through," the organization's Policy Director Liz Ryan Murray said in a statement.  

Sen. Jeff MerkleyJeffrey (Jeff) Alan MerkleyPortland protesters clash with law enforcement for first time since federal presence diminished New York police confirm arrest of protester in unmarked van Overnight Defense: Guardsman to testify Lafayette Square clearing was 'unprovoked escalation' | Dems push for controversial Pentagon nominee to withdraw | Watchdog says Pentagon not considering climate change risks to contractors MORE (Ore.), the ranking Democrat on the Senate Consumer Protection and Financial Institutions Subcommittee is urging CFPB to resist efforts to weaken what he called "badly needed rules" for payday lenders.

"Payday lending is an abusive industry that traps working families in an endless cycle of debt, and it's well past time to break that cycle," he said in a statement.  "The notion that lenders should have to take into consideration a borrower's ability to repay a loan is just common sense."



The Health and Human Services Department and the Food and Drug Administration will hold a public hearing to discuss FDA's proposal to change the labeling rules for generic drugs and biological products. http://1.usa.gov/1FXuI1Z

The Energy Department's Office of Energy Efficiency and Renewable Energy will hold a meeting on energy conservation standards for residential furnaces. http://1.usa.gov/1FXuI1Z

The Justice Department will hold a meeting by teleconference to discuss the final report of the President's Task Force on 21st Century Policing. http://1.usa.gov/1Nk1gUk



The Obama administration will publish 222 new regulations, proposed rules, notices and other administrative actions in Thursday's edition of the Federal Register.

Here's what to look for:

--The Department of Defense (DOD) will issue new military enlistment standards that remove barriers for homosexuals to serve in the armed forces.

The Obama administration previously struck down the controversial "Don't ask, don't tell" policy that prohibited openly gay people from serving in the military in 2011.

The Defense Department already recognizes gay service members; however, this move will formally update the enlistment standards, which haven't been changed in nearly 10 years.

"By removing all references to homosexuality, otherwise qualified applicants are now free to apply and enroll in a military academy without prejudice or fear of reprisal," DOD writes. "This interim rule is required immediately to remove any legal and policy restrictions which would prevent a potential applicant from entry into a military based solely on their sexual orientation."

The enlistment standards also address criteria such as a person's age, character, education and physical fitness, among other criteria, according to the DOD.

The changes go into effect immediately. http://bit.ly/1HNkYK3

--The Department of Energy (DOE) will consider new energy conservation standards for residential clothes dryers.

The Energy Department's Office of Energy Efficiency and Renewable Energy is issuing a request for information as it considers whether new efficiency rules are necessary for residential clothes dryers. The results could lead to future rulemaking.

The DOE last updated the energy conservation standards for residential clothes dryers in 2011, and those rules just took effect in January.

The public has 45 days to comment. http://bit.ly/1HNkSlB

--The National Marine Fisheries Service (NMFS) will consider listing porbeagle sharks as an endangered species.

The agency will review the status of the shark because of a court decision that found it could not disregard a 2010 petition from Wild Earth Guardians.

The NMFS will make a decision on whether to list the shark as endangered by Dec. 12, 2015.

The public has until May 12 to comment. http://bit.ly/1CeNCii

--The Federal Trade Commission (FTC) will issue new energy labeling requirements for television manufacturers.

The FTC's rule requires manufacturers to disclose to consumers a range of the highest and lowest energy consumption used by their televisions. The agency is updating that range.

The changes go into effect on July 15. http://bit.ly/1HQgE9s



Guns in DC: The National Rifle Association is cheering Republican legislation that would make it easier for gun owners to obtain firearms in the nation's capital. http://bit.ly/1EZ4RW4

Second (Budget) Amendments: Gun-rights groups are rallying their members behind a series of budget measures aired at strengthening the Second Amendment and restricting gun-control efforts. http://bit.ly/19o8Vnm

Payday loans: The Consumer Financial Protection Bureau is proposing new rules for payday lenders to protect borrowers. http://bit.ly/1CSld3H

Consumer protections: President Obama is defending the Consumer Financial Protection Bureau from Republican budget attacks. http://bit.ly/1byJhOn

Amish dispute: The Obama administration is in hot water over workplace safety policy that critics say discriminates against Amish employees. http://bit.ly/1CrLm8O



80 percent: The number of payday loans that are rolled over into new loans within 14 days.

60 percent: The number of payday loans that are renewed seven or more times in a row, typically adding a 15 percent fee for every renewal. 

Source: CFPB



"For years, the District of Columbia has infringed on its residents' Second Amendment rights and rendered them vulnerable to criminals who could care less what the gun laws are," -- Sen. Marco RubioMarco Antonio RubioTrump putting TikTok ban on hold for 45 days: report The Hill's Morning Report - Presented by the Air Line Pilots Association - Biden VP possible next week; Meadows says relief talks 'miles apart' Pompeo: Trump taking action on Chinese software firms 'in coming days' MORE (R-Fla.) talking about his bill to strike down many of the most restrictive gun laws in Washington, D.C.


We'll work to stay on top of these and other stories throughout the week, so check The Hill's Regulation page (http://thehill.com/regulation) early and often for the latest. And send any comments, complaints or regulatory news tips our way, tdevaney@thehill.com or lwheeler@thehill.com. And follow us at @timdevaney and@wheelerlydia.

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