Good News: Non-Recourse Pawn Loans” Remain Excluded from the CFPB Revised Regulations on Payday, Vehicle Title, and Certain Small-Dollar Loans   

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July 8, 2020

On July 7, 2020, the CFPB published its long-expected revisions to the Regulation on Payday, Vehicle Title, and Certain Small-Dollar Loans. The text of the amendments and a comprehensive explanation of the reasons behind them can be read HERE.

This is a 237 page publication, so we will cover the most important pieces for pawnbrokers here.

“Non-recourse pawn loans” are not covered under the 2020 amended rule. Traditional possessory, non-recourse pawn loans were not covered under the CFPB’s 2017 final rule. Instead, they were among the codified “exclusions” from the scope of the 2017 final rule, as originally stated at 12 C.F.R. §1041.3(d)(5).

Traditional, non-recourse pawn loans where the pawnbroker has custody of the collateral for the entire duration of the loan are still excluded under the amended rule.

The NPA worked hard to secure the exclusion for traditional possessory, non-recourse pawn loans from the 2017 rule. Team GRC is very pleased to report that once again this hard work paid off.

Because today’s published changes do not affect traditional possessory, non-recourse pawn loans, we will restrain ourselves from further celebration and let you get back to running your businesses.
The lobbyists, attorneys and consultants retained by the NPA, along with timely member reach out programs, have been successful in keeping our industry from being included in the CFPB and other agencies’ regulations.

The NPA Team GRC advisors are continually monitoring proposed regulations and legislation that could impact the pawn industry.

If you have questions about the amendments to the regulation announced today and their relationship to the pawn industry, please email grc@nationalpawnbrokers.org and we’ll do our best to answer them.