Payday Loan Focused Legislation Passes in House
Inside Subprime: April 1, 2019
By Lindsay Frankel
New legislation that aims to reverse recent efforts by the Consumer Financial Protection Bureau to dismantle payday loan consumer protections passed in the House Financial Services Committee last week.
Democratic lawmakers have criticized the actions of the bureau under former acting director Mick Mulvaney and current director Kathy Kraninger as demonstrating an anti-consumer agenda. During Kraninger’s first appearance before the Senate Banking Committee, she was questioned about the bureau’s rollbacks of the Obama-era payday loan rule, the decision to halt examinations for violations of the Military Lending Act, and the agency’s lack of enforcement actions against bad actors.
When introducing the Consumers First Act, Waters stated that it would “reverse the harmful changes the Trump Administration has imposed on the Consumer Bureau by restoring the agency’s supervisory and enforcement powers and increasing the transparency and accountability needed for the agency to carry out its important mission.”
If enacted, the legislation would limit the allowable number of political appointees to the CFPB, ensure the availability of complaint information to the public, clarify the bureau’s duty to enforce fair lending laws, and implement reforms to the Consumer Advisory Board, among other provisions.
During the markup of the legislation, Committee Ranking Member Patrick McHenry, R-N.C., criticized the legislation as being ineffective. “If you really want to make the agency accountable to the American people, let’s start with the fundamentals [and] change the CFPB’s organizational structure [and] its fundamental mechanisms,” McHenry said. “There are fundamental reforms we can have for this agency so that it can endure and last, all of which would bring greater accountability and transparency.”
During her acceptance speech for the NAACP Chairman’s Award, Rep. Waters commended the committee’s decision to pass the bill, stating that she is not afraid to go after bad actors. “Fraudulent payday loan operators, title loans companies, and student loan servicers, we know who you are. I have the gavel, and I’m not afraid to use it.”
Since her nomination as Financial Services Committee Chairwoman, Waters has been committed to consumer protection and maintaining the intended mission of the CFPB. “Of particular importance is ensuring that the Consumer Financial Protection Bureau is not dismantled by Trump’s appointees,” he stated at the time. “This critical agency must be allowed to resume its work of protecting consumers from unfair, deceptive or abusive practices without interference from the Trump Administration.”
For more information on scams, predatory lenders and payday loans, see our city and state financial guides including states and cities like California, the District of Columbia, Florida, Illinois, South Carolina, Texas and more.