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Last week CFPB Director Kathy Kraninger testified in front of the House Financial Services Committee, marking her first hearing since taking the helm last December.
Percy the Payday Loan Shark made his 2019 debut at the hearing, speaking to attendees outside. Percy wanted to give a huge thanks to Kathy Kraninger for all she has done to aid Payday Loan Sharks.
Community and Consumer groups throughout the country put out statements following the hearing:
Community and consumer advocates released statements ahead of Kraninger’s hearing to demand accountability from her agency. “Despite her agency’s name, consumers have taken a back seat at the Consumer Financial Protection Bureau in the last year,” U.S. PIRG said on Wednesday. “This CFPB is betraying the mission Congress created it to undertake, which is standing up for consumers in the financial marketplace,” said Linda Jun of AFR in a Stop The Debt Trap statement ahead of the hearing.
And, throughout the hearing, we clipped videos of member questions that were spread far and wide. Probably the most damning clip of them all, Rep. Porter exposed Kraninger for not knowing how to calculate an APR on a very simple loan, which speaks to the qualifications of this director. Rep. Madeleine Dean honed in on Kraninger’s hypocrisy, stating that she is putting the mission forward on righting the wrongs with student lending, but has left the student loan ombudsman position open for 6 months.
Some Press Coverage
Mother Jones published an excellent recap of new committee members Reps. Alexandria Ocasio-Cortez, Katie Porter, Ayanna Pressley, and Rashida Tlaib grilling Kraninger, and both the AP and LA times reported on Chairwoman Waters commitment to undo the damage done to the CFPB caused by then-Director Mick Mulvaney. “This committee will not tolerate the Trump administration’s anti-consumer actions” Waters said during Kraninger’s testimony.
Huge shout out to all of the organizations and advocates who participated in live-tweeting the hearing. We couldn’t #StopTheDebtTrap and #ProtectConsumers without their support!
Kraninger is set to testify once more in front of the Senate Banking, Housing, and Urban Affairs Committee on Tuesday, March 12th.
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March 11
Highlight
A Restriction on Payday Lenders Was Just Delayed. Democrats Want to Know Why
March 8, Time
Abby Abrams
This week, House Democrats began looking into a recent decision by the agency to delay a rule on payday lending.“This committee will not tolerate the Trump Administration’s anti-consumer actions,” Rep. Maxine Waters said at a hearing that looked into the issue, among others, on Thursday.
Top Stories
CFPB’s payday rule rollack sows confusion
March 4, American Banker
Kate Berry
Small-dollar lenders won a huge victory last month when the Consumer Financial Protection Bureau proposed abandoning tough new underwriting requirements before they become effective. But the agency’s reversal is stoking confusion in the industry.
Parties file status report in trade group lawsuit challenging CFPB payday loan rule
March 5, JD Supra
Alan S. Kaplinsky
The CFPB and the two industry trade groups that filed a lawsuit in a Texas federal district court challenging the CFPB’s final payday/auto title/high-rate installment loan rule (Payday Rule) filed a status report with the court on March 1.
Dems urge CFPB to reinstate military lending exams
March 5, American Banker
Rachel Witkowski
Senate Democrats sent a letter Tuesday asking the Consumer Financial Protection Bureau to reinstate examinations of lenders for compliance with the Military Lending Act.
Payday Loan Rule Rollback Consistent with CFPB’s New Anti-Regulation Pro Industry Mission
March 6, Jurist
Nathalie Martin
Claiming that the studies it relied on in the original rule are now suddenly flawed, the Trump-era CFPB has chosen to favor lender profits over protections for low-end consumers.
Move To Pull Consumer Protection Rule Heightens Debate Over Payday Lending
March 7, NPR
Daniella Cheslow
Democrats, who took control of the House in January, oppose rescinding the payday loan rule. Consumer advocates say the rule is vital. So do veterans’ groups and the NAACP.
Consumer financial services: The road ahead: Small-dollar loans
March 7, JD Supra
John Wagner, Benjamin Saul, Margaux Curie
In February 2019, the CFPB released the highly anticipated revamp of its Payday Rule, reinforcing its more lenient attitude towards payday lenders. In light of the Bureau’s softer touch, as well as similar developments at the banking agencies, we expect states to step into the void and take further action to curtail payday lending at the state level.
BankThink Bank deposit advances are payday loans in disguise
March 8, American Banker
Mike Calhoun
The data on this last era of bank payday loans showed that they are devastating for American consumers while posing serious risks to banks’ safety and soundness and their reputations.
State News
Planned consumer protection rule against payday lenders barred by feds
March 6, Idaho Press
Riley Bunch
A federal rule that would have provided an extra level of consumer protection against payday lending practices has been proposed to be rescinded on the basis that it would reduce access to short-term loans for consumers.
Editorial/Opinion
CFPB confusing ‘freedom of choice’ with ‘freedom to be fleeced’
March 6, The Hill
Ben Edwards and Chris Odinet
So far, Kraninger’s CFPB appears eager to live up to its critics’ worst fears. It’s signature initiative under her tenure has been to eviscerate new rules to protect the public from predatory payday lending.
Government puts service members at financial risk
March 8, SaulkValley.com
Pam Farris Rochelle
The U.S. Consumer Protection Agency of our federal government recently dropped requirements for payday loans to meet standards in the Military Lending Act, which protects members of our Armed Forces from financial predators.