Trump CFPB protected payday lenders under Mick Mulvaney

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One of the things we need to keep an eye on is the ability of this administration * to continue to do its signature misdeeds under the cover of the pandemic. For example, Camp Runamuck has been a strong advocate for the parasitic payday loan industry. In 2017, the Consumer Finance Protection Bureau, a brainchild of Senator Professor Warren, enacted a regulation requiring these more formalized loan sharks to ensure their clients can pay their fees before offering a loan. It makes perfect sense, unless you’re in the business of squeezing blood from stones, which this industry is.

Thus, now under new management, the CFPB “revises” this rule and, according to a former employee, prepares his books to justify the move. Of The New York Times:

He claimed that those appointed by President Trump to the Consumer Financial Protection Bureau manipulated the agency’s research process to justify changing a 2017 rule that would have sharply reduced high-interest payday loans.

Outgoing staff member Jonathan Lanning detailed several maneuvers by his agency’s political overseers that he saw as legally risky and scientifically indefensible, including pressuring staff economists to water down their findings on lending on payroll and use statistical tricks to minimize the harm consumers would suffer if the payday restrictions were repealed. A copy of the note was obtained by The New York Times from a current employee of the office.

It’s a big deal. According to a study cited by the Times, industry clients borrow $ 29 billion per year and pay $ 5 billion in fees. And the results often differ little from the loans taken out with Sluggo on the docks.

While short term loans are designed as an emergency stopgap, many borrowers find themselves unable to repay their debts quickly and borrow again. Half of all payday loans are part of a streak that is extended at least nine times, accumulating fees that can exceed the value of the original loan, according to a study released by the Office of Consumer Affairs to support its initial restrictions. .

Either way, the administration wanted this rule changed, and they were apparently willing to play with the data to do so.

In his memo, Lanning said the office’s leadership, reinforced by a new layer of political appointees installed by Mr. Mulvaney, had manipulated the review process to steer it toward that goal. As early as May 2018, when Mr Mulvaney publicly claimed to keep an open mind on the review, economists in the office learned that Mr Mulvaney had decided to abolish the core provisions of the payday rule. They were asked to research only their favorite changes, without analyzing whether alternative approaches would work better for consumers or the industry.

With this administration *, of course, it is only a matter of wear and tear.

In addition to this underhand deception, next week, the administration * will once again attempt to install Representative John Ratcliffe, Republican of Texas, as director of national intelligence. A Senate hearing on Ratcliffe’s appointment is scheduled for next week. Ratcliffe cut his teeth with Camp Runamuck as a loud nuisance on behalf of the Speaker * while serving on House committees. He is otherwise painfully unqualified – so much so, in fact, that when the President * attempted to install him last July, even Republican senators ran and hid. In the meantime, Ratcliffe hasn’t become more skilled, and now that we’re in the middle of a national security crisis, the administration has decided to give this guy another chance. It never stops.

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