Payday lenders reportedly seek to infiltrate the CFPB
Inside Subprime: March 9, 2018
By Alex Huntsberger
The Consumer Financial Protection Bureau (CFPB) was created to, well, protect consumers, from predatory business practices, particularly financial ones. That’s the past five months have been worrying, as the CFPB increasingly moves from protecting consumers to protecting the very companies that prey on them.
It all started when the CFPB’s original director, Richard Cordray, stepped down from his post early in order to run for governor in Ohio. In his place, President Trump appointed Mick Mulvaney as acting-director, though not before a fair amount of tussling between Mulvaney and Cordray’s self-appointed successor Leandra English.
An avowed enemy of government regulation, Mulvaney has taken several steps to alter — or as some might see it, to obstruct – the CFPB’s core mission of protecting consumers from harmful financial actors.
For example, Mulvaney requested a grand total of zero dollars in operating funds for the first quarter of 2018; he dropped a lawsuit against an online loan shark that charged customers interest rates as high as 950 percent; and he has announced that the bureau is “reconsidering” its landmark rule designed to burn predatory payday lending.
It comes as no surprise that the payday lending industry sees Mulvaney as sympathetic to its cause. What might be a little more surprising, however, is just how bold some members of the industry have been in their entreaties.
For example, the Associated Press recently reported that the CEO of a payday lender that was then under investigation by the bureau cold-emailed Mulvaney in January in an attempt to apply for the position of CFPB director.
Prior to Mulvaney taking over the bureau, an investigation had been opened into the business practices of World Acceptance, a prominent payday lender based in South Carolina. On January 22nd, the company announced that the investigation had been closed without any further action by the CFPB. However, the company also announced that CEO Janet Matricciani would be stepping down.
Thanks to a Freedom of Information request by the AP, it has now been learned that Matricciani emailed Mulvaney on January 20th, two days before that announcement, asking that she be considered for the role of CFPB director.
“I would love to apply for the position of director of the CFPB. Who better than me understand the need to treat consumers respectfully and honestly, and the equal need to offer credit to lower income consumers in order to help them manage their daily lives?” she wrote, attaching her resume and even citing the current CFPB investigation as evidence of her relevant experience.
For what it’s worth, a senior advisor to the Mulvaney told the Associated Press that “Matricciani is not being considered for any jobs at the CFPB.” However, it should also be noted Worldwide Acceptance contributed thousands of dollars to Mulvaney while he served in Congress as a representative from South Carolina, prior to his joining the Trump administration.
The Trump administration has yet to nominate a permanent replacement for Cordray. But at this rate, they might as well nominate this guy.
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