Speed Reads

consumer alert

Mick Mulvaney's CFPB seems to be going conspicuously soft on payday lenders

On Monday, the Consumer Financial Protection Bureau (CFPB) quietly dropped its four-year-old investigation of World Acceptance Corp., a payday lender in the home state of Mick Mulvaney, the acting CFPB director and White House budget director. World Acceptance Corp., which donated at least $4,500 to Mulvaney's congressional campaigns, announced the CFPB's move in a press release, and the CFPB had no comment for International Business Times.

Last Thursday, without explanation, the CFPB dropped a lawsuit against four payday lenders in Kansas that charge interest rates of up to 950 percent. On Jan. 16, the agency — set up in 2010 to protect consumers — announced its intention to scale back regulations finalized in October by previous CFPB Director Richard Cordray over strong objections from the payday lending industry. The rules are designed to prevent consumers from being saddled with onerous loans by payday lenders, banks, and auto lenders.

Consumer advocates have expressed concern that Mulvaney is going easy on payday lenders, which provide short-term loans at high interest rates to mostly low-income people. They cite the $57,100 in campaign contributions Mulvaney had received from the payday lending industry over his political career, according to the National Institute on Money in State Politics, including $31,700 in the 2015-16 election cycle.

Mulvaney, who dismisses such concerns, outlined his goals for the CFPB in a Tuesday memo obtained by ProPublica's Jesse Eisinger. He reminded CFPB staff they are government employees. "We don't just work for the government, we work for the people," he wrote. "And that means everyone: those who use credit cards, and those who provide those cards; those who take loans, and those who make them; those who buy cars, and those who sell them. All of those people are part of what makes this country great." At the very least, payday lenders will be happy to know they are consumers in need of protecting, too. You can read Mulvaney's mission statement, and Slate's biting retort.