The acting director of the Consumer Financial Protection Bureau (CFPB) dropped the agency’s probe of a payday loan collector and is mulling ending cases against three high-interest lenders, Reuters reported Friday.
Acting CFPB Director Mick MulvaneyMick MulvaneyTrump's relocation of the Bureau of Land Management was part of a familiar Republican playbook Jan. 6 committee issues latest round of subpoenas for rally organizers The Hill's Morning Report - Presented by Alibaba - To vote or not? Pelosi faces infrastructure decision MORE decided against suing Kansas-based National Credit Adjusters (NCA), a company that collects debt from high-interest loans issued on tribal land, according to Reuters.
Former CFPB Director Richard Cordray was reportedly set to sue the NCA, but Mulvaney dropped the case, Reuters reported.
Reuters also reported that Mulvaney was considering ending the CFPB’s probes into Security Finance, Cash Express LLC and Triton Management Group, three lenders of high-interest, short-term “payday” loans.
The CFPB under Cordray found that the three lenders and their debt collectors pressured, misled and harassed consumers into dangerous cycles of debt, Reuters reported. Cordray reportedly planned to seek millions of dollars in damages and fines.
Mulvaney’s decision to drop the NCA case and potentially end three others is the latest way that the former conservative congressman is pulling back on the CFPB’s policing of financial markets.
Mulvaney, who is also the director of the White House Office of Management and Budget, has pledged to end the CFPB’s track record of aggressively fining and regulating lenders it has deemed to have abused consumers. Mulvaney said the CFPB under his watch would use far more restraint and show more deference to the needs of businesses.
Cracking down on payday lenders was one of Cordray’s top priorities at the CFPB. The bureau released a rule shortly before Cordray resigned last November meant to protect consumers from cyclical debt from repeatedly taking out payday loans. Lawmakers have introduced a resolution to repeal the CFPB rule, though it has not received action on the House floor.
The CFPB announced in January that it would delay compliance with new regulatory rules for payday loans. The agency said it is considering how to roll back those rules. Mulvaney will allow lenders subject to the payday measure to ask for a delay in complying with the first deadline.
Lenders covered by the rule must register with the CFPB by April 16, while the rest of the rule takes effect on Aug. 19, 2019. The bureau delayed the April deadline in order to prevent covered lenders from spending time and money to comply with the rule that could be drastically different by 2019.
Democrats and liberal allies of Cordray have fumed over Mulvaney’s stance on payday loans, which they say threatens consumers and lets bad actors run free.
“Let’s see the case be made, with full debate, on whether the zealots and toadies can justify repealing a rule to protect consumers against extortionate payday loans,” Cordray said in January.
Republicans and the financial services industry have praised the Mulvaney for easing off of lenders they say were strangled by the bureau’s former leadership.