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Republican Destruction of CONSUMER Financial PROTECTION Bureau Now Includes Siding with Payday Lenders Over CONSUMERS
Kathy Kraninger gutted the CFPB rule that attempts to stop payday lenders from trapping borrowers in cycles of debt. Shameful.
The Consumer Financial Protection Bureau on Wednesday proposed significantly weakening Obama-era rules governing payday lenders, boosting the fortunes of an industry accused of keeping low-income borrowers trapped in a cycle of debt.
Under the existing rule, set to take effect in August, payday lenders would be required to take several steps to ensure borrowers can afford the loans they are being offered. The latest proposals would rescind that requirement and delay the rule’s implementation until 2020.
The move is a big win for payday lenders. The industry feared the new regulations would force many of them to close their doors. Payday lenders aggressively lobbied lawmakers to block the rule last year and when that failed turned their attention to convincing the CFPB, now under the leadership of a Trump appointee, to change course.
Sen. Elizabeth Warren (D-Mass.) called on Kathy Kraninger, the new director of the CFPB, who also was closely involved with ripping children from their parents arms, to immediately reverse this decision.
“The rule you released today makes a mockery of the CFPB's statutory mission of protecting consumers. It should be withdrawn immediately,” Warren, who helped establish the CFPB under President Obama....
House Financial Services Committee Chairwoman Maxine Waters (D-Calif.) also called on Kraninger to withdraw the rule in a statement Wednesday. Sen. Sherrod Brown (D-Ohio), the ranking Democrat on the Senate Banking Committee, which oversees the industry, criticized the revision as well.
Guess who's thrilled? Payday lenders! Guess who will be hurt? CONSUMERS. Our American people who the government and this agency specifically are supposed to work every minute to protect and work on behalf of.
Industry officials said they were pleased with the proposed changes.... The proposed revision is one of the most significant steps the Trump administration has taken in its effort to destroy the CFPB.... It dropped several lawsuits against payday lenders last year and stripped enforcement powers from its fair lending office.
Consumer advocates said the CFPB had gone too far. The changes would “unwind the core part” of payday regulations, said Richard Cordray, the bureau’s former director.... The overhaul of the payday lending rule is “disturbing, but not surprising,” said Linda Jun, senior policy counsel at Americans for Financial Reform, a consumer advocacy group. The “industry thrives on being able to do whatever it wants. That is their business model, to have zero standards.”
Senator Warren further stated:
“The agency's release of this new rule suggests that, under your leadership, the CFPB is continuing [former acting Director Mick Mulvaney’s] pattern of going easy on payday lenders at the expense of consumers,” Warren wrote.
The original rule, she wrote, was “carefully calibrated to end [the] devastating cycles of debt” caused by payday loans’ high interest rates, “while simultaneously preserving access to payday loans for eligible borrowers in need.”
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