One of the most controversial aspects of the country’s financial industry is the prevalence of payday lenders and the business practices that consumer advocates see as predatory. The Obama administration unveiled new guarantees in 2016, specifically intended to protect the public.
Last month, Donald Trump’s Consumer Financial Protection Bureau, headed by Budget Director Mick Mulvaney, announced that these rules would effectively be ignored. CNBC reported yesterday on the latest effects of the Trump administration’s approach to the payday lending industry.
The federal consumer watchdog has dropped a lawsuit against a lender who allegedly charged people interest rates of up to 950%. It’s part of a move away from aggressive enforcement under interim manager Mick Mulvaney that angered career staff, NPR reported. The Consumer Financial Protection Bureau confirmed to CNBC on Monday that it dropped the lawsuit against Golden Valley Lending in January. Mulvaney, who also heads the administration’s Management and Budget Office, was appointed by President Donald Trump to lead the CFPB after Democrat Richard Cordray resigned Mulvaney – a harsh critic of the CFPB while in office in Congress – decided to drop the lawsuit even if career managers wanted to move forward, several CFPB staff told NPR.
To note, NPR report makes it clear that CFPB officials spent years building a case against Golden Valley Lending, and if the litigation was successful, thousands of Americans could get some of their money back. Mulvaney didn’t care.
The report specifically highlighted a Michigan woman named Julie Bonenfant, who faced a financial crisis that caused her to borrow $ 900 from Golden Valley Lending. She quickly discovered that “her payments expected in less than 12 months will total $ 3,735, more than four times what she borrowed.”
Bonenfant says NPR, “To be honest, I’m really angry, really pissed off, because I voted for Trump. So knowing that her guy has rejected this case that affects people like me, I feel a little stupid – just a little betrayed. “
It’s an understandable reaction. Trump, described by Sen. Marco Rubio (R-Fla.) As a brazen “con man” during the campaign, assured Americans he would be tough on financial institutions if elected. Like so many of its promises, the opposite turned out to be true.
Payday lenders couldn’t be happier. The New York Times recently reported that in April, “Hundreds of members of the payday loan industry will be heading to Florida for their annual retreat featuring golf and networking at a lavish resort just outside of Miami. The resort is located. be the Trump National Doral Golf Club “.