The CFPB and the two trade groups that filed a lawsuit in April 2018 in a Texas federal district court challenging the CFPB’s final payday/auto title/high-rate installment loan rule (Payday Rule) have filed a joint motion seeking a stay of the litigation for the duration of the CFPB’s rulemaking to reconsider the Payday Rule. The motion also seeks a stay of the Payday Rule’s compliance date and a waiver of the CFPB’s obligation to file an answer.  The two trade groups are the Consumer Financial Service Association of America, Ltd. and the Consumer Service Alliance of Texas.

In January 2018, the CFPB announced that it intended to engage in a rulemaking process to reconsider the Payday Rule pursuant to the Administrative Procedure Act.  Although the Payday Rule became “effective” on January 16, 2018, the compliance date for the rule’s substantive requirements and limits (Sections 1041.2 through 1041.10), compliance program/documentation requirements (Section 1041.12), and prohibition against evasion (Section 1041.13) is August 19, 2019.

In the joint motion, the CFPB and trade groups assert that the rulemaking “may result in repeal or revision of the Payday Rule and thereby moot or otherwise resolve this litigation or require amendments to Plaintiffs’ complaint.”  They also assert that a stay of the Payday Rule’s compliance date during the litigation’s pendency is necessary to prevent irreparable injury, claiming that none of the expenditures necessary to comply with the Payday Rule would be compensable by money damages should the Payday Rule be invalidated or repealed.  The CFPB and trade groups ask the court to stay the compliance date until 445 days from the date of final judgment in the litigation to ensure sufficient time for compliance should the plaintiffs’ claims be unsuccessful.