Two industry groups representing payday lenders are suing the Consumer Financial Protection Bureau on its authority to implement a rule over the small-dollar lending market.
The Community Financial Services Association of America (CFSA) and the Consumer Service Alliance of Texas are seeking to invalidate the CFPB’s final rule on “Payday, Vehicle and Certain High-Cost Installment Loans,” implemented under former Director Richard Cordray in 2017.
“The lawsuit alleges that the rule violates the Administrative Procedure Act (APA) because it exceeds the Bureau’s statutory authority and is arbitrary, capricious and unsupported by substantial evidence,” according to the news release from the CFSA.