consumer financial protection bureau – payday and auto title loan rule

Consumer Financial Protection Bureau
Name
Student
Institution
Date

TO: Employees
FROM: Bureau of Consumer Financial Protection
DATE: January 30, 2017
SUBJECT: Consumer Financial Protection Bureau
Point #1: Proposed Tax Policy
SUBJECT: Consumer financial protection bureau – payday and auto title loan rule
This memo focuses on the provision of Payday, Vehicle Title, and Certain High-Cost Installment Loans. Certain rules will apply in regards to acquiring such loans. According to the Consumer Financial Protection Bureau, the loans will be available to all applicants as long as they qualify. Precisely, the Bureau has proposed for the establishment of the 12 CFR 1041, which will comprise regulations that enhance consumer protection for various consumer credit products (Federal Register, 2017). These rules will focus on payday, vehicle titles, as well as certain high-cost installment loans. These three methods will enable employees to access loans based on their capacity to pay. The rules are presented to the workers to that they can raise any inquiries or identify the areas that need clarification. The company’s management expects employees to observe the rules and to follow these regulations. The primary aim of this rule is to establish a formal and efficient method of issuing loans to employees at our investment firm.
Point #2: Benefits and Desired Outcome of the Policy
With the establishment of this policy, the bureau aims to attain an effective technique of borrowing and paying loans in time.

In regards to the traditional ‘Payday’ loans, our investment firm will issue a loan ranging from $300-$500, and it will be paid within the next payday (Federal Register, 2017). Second, the auto-title loan will involve lending employees immediate cash, which will be covered by the title to the consumer’s car. The auto-title loans are also short-term, similar to the payday loans. The other type of loan issued is the installments loans, which will have a total annual interest rate of more than 36% (Federal Register 2017). Consumers will have the chance to choose their most suitable loans.
Point #3: Affected/ Targeted Companies and Industries
Our investment company and other firms in various industries wish to implement this rule by the bureau soon after approval from the employees. Precisely, some of the industries that will be affected by this policy include construction industry, healthcare industry, automotive industry, and finance industry. For these industries, the comments about any suggested changes or additions will only be accepted and considered if set by October 7, 2016 (Federal Register, 2017). In this case, employees are given a chance to give their input and raise any complaints or ask for clarification. The implementation of this rule will occur immediately it is enacted by the management. Employees are the main targets of this rule in that it widens the opportunity for accessing loans and paying in favorable conditions. The Bureau has issued this notice to propose consumer protection for the three types of loans, especially for employees who live on a paycheck-to-paycheck lifestyle. Cooperation between the firm’s management and the bureau will ensure the successful adoption of the rule.
The implementation of this rule will have a major positive effect on the management of loans at our investment firm. Firstly, it will enable the workers to seek funds for meeting their recurring expenses. This rule mainly targets employees who lack access to other credit products. Additionally, the Bureau will work hand-in-hand with the Consumer Protection Act to avoid unfair and abusive practices. The Bureau also aims at eliminating other lenders whose loan policies deviate substantially and fail to determine a consumer’s ability to pay back a loan. Our management will cooperate with the bureau to ensure the protection of employee rights and their ability to pay loans in time. The Bureau will also ensure that the charges for these loans are fair and logic to avoid any form of financial exploitation. Overall, the successful execution of this rule on taxes will require the cooperation between the Bureau, management, and employees.
Work Cited
Federal Register. Payday, Vehicle Title, and Certain High-Cost Installment Loans. [online], January 30, 2017. Available at https://www.federalregister.gov/documents/2016/07/22/2016-13490/payday-vehicle-title-and-certain-high-cost-installment-loans.