It is never good to reduce regulation, especially on a Democratic Party priority, according to the mainstream media.
Mark Mulvaney, in his role as director of the Consumer Financial Protection Bureau, announced earlier this year the agency would roll back rules that were about to take effect dealing with online and payday lenders.
The 1,690-page consumer lending rule would require online and payday lenders to take steps to ensure their customers could repay the loans that would have left most of their customer bases ineligible for loans. The rules, enacted under the Obama administration and former director Richard Cordray, now a Democratic candidate for governor of Ohio, also would have limited the times consumers could roll over their loans, exempted credit unions, community banks or other entities that derived less than 10 percent of their revenue from consumer loans and limited the number of times collectors could debit customers’ accounts.
Industry observers said the rules and lawsuits were constructed to put the consumer lending industry out of business.
The administration quietly walked away from four lawsuits against payday lenders that were prepared to press claims included in the new rule, and last week, Mulvaney announced the agency was indeed looking to abandon the rule before it even completely takes effect.
Nearly a fifth of American workers, many of them immigrants and others paid in cash, do not use any bank and thus cannot approach banks for loans. Nearly two-thirds of Americans could not financially handle a $1,000 car repair. Online lenders say they collect 80 percent of their loans on time and 91 percent overall and that most of their customers come from the lower-third, earnings-wise, of the workforce.
But in responding to the news, mainstream media seemed to think freeing online and payday lenders from regulations that likely would have put many of them out of business was a blow to the poor.
A year in, Jamelle Bouie at Slate wrote, the Trump administration “has done more than any administration in recent history to undermine public goods, support entrenched wealth and allow businesses to operate untrammeled by accountability or regulation.”
The Kansas City Star also covered the issue extensively because call centers for some of the loan companies targeted by the Obama administration were in nearby Kansas.
“CFPB drops Kansas payday lending case, stoking fears Trump is backing off industry,” its headline said.
“Without explanation, the Consumer Financial Protection Bureau has dropped a lawsuit in Kansas it had filed a year ago against four payday lending companies,” it began. “The move reinforced worries among consumer advocates that the federal watchdog agency is backing away from scrutinizing the payday lending industry.”
The story went on to inform us that “news of the dismissal adds to other recent actions taken by the CFPB that cause consumer advocates to worry that the agency established to protect consumers now favors the industries it’s supposed to scrutinize.
“’It’s deeply concerning that the Trump administration is working to completely gut the CFPB from the inside,’ said Andy Morrison, campaigns director for New York-based advocacy group New Economy Project.”
“It definitely seems that Mulvaney is doing what he can to make life easier for payday lenders, which is completely contrary to what almost everybody in American thinks should happen,” said Diane Standaert, executive vice president for the Center for Responsible Lending, a group that some said was externally dictating the CFPB’s agenda during the Obama/Cordray administration.
No conservative organizations or advocacy groups were contacted for a contrasting quote, and no information was offered on how Standaert knows what all of American wants with regard to consumer lending.