The rule, which was years in the making, created vital protections for consumers of payday, car title, and some longer-term loans to ensure that predatory lenders don’t trap customers in unaffordable loans. Underlying the rule is the common-sense principle that lenders should consider whether borrowers have the ability to repay a loan before they risk their financial well-being.
Kraninger’s job as CFPB director would be to defend consumers against abuse at the hands of Wall Street banks and predatory lenders, but she has shown no sign of being willing to take on this vital role. The full Senate should reject her nomination.
Voters of all political parties overwhelmingly oppose the actions taken by Mick Mulvaney to undermine the mission of the Consumer Financial Protection Bureau and feel a strong connection between lax enforcement of the rules on Wall Street and their daily welfare. Ten years after the 2008 financial crisis brought on a searing recession, the survey revealed enduring, strong, and bipartisan support for tougher regulation of Wall Street and predatory lenders.
Mick Mulvaney has been doing the bidding of payday lenders for years, but putting the CFPB’s weight behind a joint legal motion with their lobbyists is a new low, even for him. Mulvaney is now openly making common cause with payday lenders to gut the CFPB’s common-sense protections for borrowers
AFR Statement: Statement on Appointment of Andrew Smith as Head of FTC Bureau of Consumer Protection
For its Head of Consumer Protection, the FTC chose a lawyer, Andrew Smith, who worked for both payday lenders and Equifax. The FTC needs a someone with a record of consumer protection, not yet another industry lawyer
“Congress has done the right thing in allowing the rule to stand. Now the spotlight is on Mick Mulvaney. Will he move ahead on his plans to unravel it, and continue to cater to the payday lenders who gave generously to his campaigns?” said Lisa Donner, executive director at AFR.
Joint Letter: 8 Organizations Warn Regulators Against Bank Payday Loans and Rent-a-Bank Arrangements
“Deposit advance” loans are payday loans, pure and simple, and data clearly show they create the same debt trap caused by non-bank payday loans. High-cost longer-term loans facilitated by banks and credit unions would also cause customers substantial harm. We also urge you to ensure that all financial institutions engaged in small dollar lending (1) limit interest rates to 36% or less, and (2) determine borrowers’ ability to repay their loans by assessing both income and expenses rather than engaging in collateral-based income-only underwriting.”
Joint Statement: Sen. Jeff Merkley, Rev. Willie Gable Jr. Condemn Ongoing Sabotage of CFPB, Demand Pres. Trump Nominate Consumer Advocate as Director
“Under the Trump administration, the Consumer Financial Protection Bureau has become the Payday Predator Protection Bureau,” said Sen. Jeff Merkley (D-Oregon). “Trump and his allies are blatantly trying to dismantle the bureau from the inside. If this isn’t a crystal clear example of the Trump administration governing of, by, and for the powerful rather than of, by, and for the people, then I don’t know what is.”
“‘Payday lenders are clearly watching this with bated breath,’ said José Alcoff, manager of the Stop the Debt Trap campaign at Americans for Financial Reform. ‘I think this is clearly a case where the system is getting more and more rigged, where they have, as they say, the fox in charge of the henhouse.’”
““When Mick Mulvaney was a member of Congress, the World Acceptance Corporation gave more campaign contributions to him than any other member of the U.S. House of Representatives. Today, as acting director of the Consumer Bureau, Mulvaney showed his gratitude by dismissing a four-year investigation into deceptive practices the company has used to trap consumers into debt. Mulvaney’s actions leave no doubt where his priorities lie – campaign friends over consumers.”