Washington D.C. (June 6, 2019)– In a blow to consumers, the Trump CFPB issued a final rule rewarding the payday industry with a 15 month delay from compliance with the ability-to-repay standard for the CFPB’s short term lending rule established in November 2017. This allows predatory payday lenders to continue approving high-interest loans – some as high as 950 percent – without restriction to borrowers that they know do not have the ability to repay them in time. Consumer watchdog group Allied Progress blasted the rule as blatant payback for the $2.5 million the payday industry gave to Donald Trump’s campaign and inaugural committees, and the estimated $1 million the payday trade association spent holding its annual conference at Trump’s Doral Golf Resort in March.
“Let’s count the ways this final rule is a total farce,”said Jeremy Funk, spokesman for Allied Progress. “For starters, the CFPB admitted that their rule was not based on a shred of new academic research, while the original rule was carefully crafted after 5 years of research and input from the full spectrum of stakeholders. As far as anyone can tell, this new rule came about based on little more than the ‘negotiations’ the agency reportedly held with a payday industry executive last year. The facts of the payday lending industry haven’t changed in the last two years – the only thing that’s changed is we have a President and a CFPB Director who don’t care if businesses prey on consumers, as long as they turn a profit.”
And then came the tainted comment process that saw thousands of suspicious, duplicative pro-industry comments. Will Director Kraninger have the audacity to claim thousands of industry-manufactured comments as evidence of public support for abusive 400 percent interest loans? The only real thing about this process is the money – over $7 billion in revenue the payday industry stands to reap if these protections are destroyed. Hopefully this doesn’t portend a full repeal of the ability-to-repay standard in the coming months; consumers can’t afford any more Trump administration favors to industry.