Mulvaney: CFPB to Seek Public Feedback on Its Activities

Elias Hubbard
Января 20, 2018

"The Bureau intends to engage in a rulemaking process so that the Bureau may reconsider the Payday Rule".

The regulator, which came under the control of Trump's budget director Mick Mulvaney in November, said it would be seeking comment on its "enforcement, supervision, rulemaking, market monitoring, and education activities". It was the brainchild of Elizabeth Warren, who at the time was a Harvard University law professor, and now is a USA senator from MA.

Under its first permanent director, Richard Cordray, the CFPB exercised its mandate aggressively, putting into place new regulations impacting huge swaths of the banking industry from mortgages to prepaid debit cards. Established under President Barack Obama, the agency has become a partisan lightning rod as Democrats see it as a critical consumer watchdog while Republicans regard it as an excessively powerful bureaucracy.

In a letter today, the Senators urged Senate leaders Mitch McConnell and Chuck Schumer to preserve the agency's independent funding stream and protect the CFPB from political interference. While the bureau did not submit a proposal to repeal the rules outright, the statement opens the door for the bureau to start the process of revising or even repealing the regulations. His announcement Wednesday was broad, aimed at the entire operations of the bureau. The rule takes aim at predatory practices by payday lenders-companies which give out high-interest loans and disproportionately target low-income borrowers, by requiring them to assess a borrower's ability to pay back debt-and capping the number of payday loans individuals can obtain.

Now, as its acting director, he's in a position to change it. So when the rules were finalized previous year, the bureau estimated that loan volume in the payday lending industry could fall by roughly two-thirds, with most of the decline coming from repeat loans no longer being renewed.

But the payday lending rules adopted by the CFPB previous year were praised by Suzanne Martindale, senior attorney for Consumers Union, who said the rule "targets the most abusive short-term lending practices" while "paving the way for more responsible lenders to emerge with safer alternatives". "By scrapping this rule, Mulvaney will allow his campaign donors to continue to generate massive fees peddling some of the most abusive financial products in existence", Warren said.

Mulvaney and the CFPB framed this push as a way to improve outcomes for both consumers and the institutions that fall under the bureau's purview. The appointment also is being challenged in court by Leandra English, the bureau deputy director who contends she is the rightful acting director.

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