Moving to Scrap Rule Aimed at ‘Bottom-Feeding’ Payday Lenders, Trump’s CFPB Accused of Betraying Core Mission
(COMMON DREAMS) Julia Conley, January 18, 2017 — The government agency tasked with shielding Americans from unfair practices by banks, creditors, and corporations announced Tuesday that it was taking steps to revise regulations for payday lenders—regarded by consumer protection advocates as predatory corporations that take advantage of people in dire financial straits.
Weeks after being installed as the new director of the Consumer Financial Protection Bureau (CFPB), Mick Mulvaney issued a statement saying the agency would reconsider its Payday Rule, finalized only in October.
“By scrapping this rule, Mulvaney will allow his campaign donors to continue to generate massive fees peddling some of the most abusive financial products in existence.”—Sen. Elizabeth Warren (D-Mass.)
The rule requires payday loan companies to vet borrowers to make sure they’ll be able to pay back their small cash loans. Payday loans are required to be paid back on the borrower’s next payday, some with interest rates exceeding 300 percent.
“The CFPB thoroughly and thoughtfully considered every aspect of this issue over the course of several years,” Karl Frisch, executive director of the progressive group Allied Progress, said in a statement. “There is no reason to delay implementation of this rule—unless you are more concerned with the needs of payday lenders than you are with the interests of the consumers these financial bottom-feeders prey upon.”