Golden Valley – a name that evokes a peaceful mountain valley covered with green and brownish cedars now has a new association: payday loans, and a government official who wants to let these predators off the hook.
Golden Valley Lending is an online payday lender that has ripped off thousands of consumers across the country with exorbitant annual interest rates ranging from 440 to to 950 percent, a crime in 17 states. The Consumer Financial Protection Bureau went after Golden Valley lending for breaking the law.
Then, in January, the consumer bureau abruptly dropped the case. The bureau’s acting head Mick Mulvaney initially tried to cover up his role in dropping the case. But in testimony before a Senate committee, Mulvaney admitted that he had made the decision to abandon the effort to hold Golden Valley accountable.
Consumers living paycheck to paycheck occasionally are too short on cash between paydays to cover their utility bills or daily necessities. That is the moment payday lenders wait for to catch them in a debt trap.
Golden Valley Lending, like other payday lenders, offers an online payday loan service targeting people when they’re financially strapped, making it easier for vulnerable borrowers to apply for the loan and get trapped into a debt cycle at over one thousand times the declared interest rate.
Robert Rogers of California, trying to help his retired mother who had taken out a payday loan from Golden Valley, called the company. The person answering the phone insisted he had to pay and threatened him, saying he’d come to his house and get the money “by any means necessary.” The company had treated borrowers who couldn’t pay the interest – or questioned their immoral methods – with threat and intimidation.
To try to avoid legal challenges, Golden Valley lending registered as officially headquartered on an Indian reservation. Under this guise, Golden Valley lending has been breaking the law for years and harmed hundreds of thousands of consumers.
The consumer bureau carefully built up a case for years with ironclad data and evidence. People at the bureau had hoped to pursue financial justice and claw back money to help people who had been hurt by the lender, until the newly acting CFPB head Mulvaney decided to drop the case in late January.
“People are devastated and angry — just imagine how you would feel if years of your life had been dedicated to pursuing justice and you lose everything,” says Christopher Peterson, a former enforcement attorney at the CFPB who worked on the case told National Public Radio.
Mulvaney’s spokesman first said in an email that it was “professional career staff” who made the decision to drop the Golden Valley lawsuit, not Mulvaney. But several CFPB staffers, who spoke on condition of anonymity for fear of losing their jobs, told NPR reporter Chris Arnold that that was not true. The staffers said Mulvaney decided to drop the lawsuit even though “the entire career enforcement staff wanted to press ahead with it.” Mulvaney’s spokesman finally had to acknowledge that “Mulvaney was indeed involved in the decision to drop the lawsuit,” according to NPR.
Mulvaney never elaborated on the reason behind his decision to drop the Golden Valley lending case. However, according to data analyzed by the Center for Responsive Politics, payday lenders gave $31,700 in 2015-16 campaign contributions to Mulvaney, ranking him the ninth among all congressional recipients from the sector. Mulvaney had received $63,000 in total campaign contributions from payday lenders during his time in congress.
In a hearing before the Senate Budget Committee on Feb.13, Mulvaney confirmed his role in dropping the lawsuit, but he told Sen. Chris Van Hollen that he could not discuss further details because an investigation into the company was continuing. Van Hollen called the decision to drop the lawsuit against Golden Valley “outrageous” and “anti-consumer.” Sen. Jeff Merkley likewise took him to task for the decision, and for initially lying about his role.
Mulvaney is still reviewing many ongoing lawsuits and investigations, and employees at the CFPB are worried that Mulvaney will abandon more cases against shady payday lenders. The only federal agency devoted to protecting consumers in the financial marketplace is giving a green light to loan sharks like Golden Valley to prey on vulnerable consumers.