Trump/Kraninger's Payback to Payday Lender Donors
New CFPB Proposal Leaves Consumers Vulnerable to Debt Trap
WASHINGTON, D.C. – This morning it was reported that the Trump/Kraninger-controlled Consumer Financial Protection Bureau (CFPB) will soon release a proposal to dismantle protections for payday loan borrowers by removing the "ability-to-repay provisions in the 2017 small-dollar lending rule issued under former Director Richard Cordray."
Kraninger is targeting the centerpiece of the Bureau's rule that would require payday lenders to consider a borrower's ability to repay before making a high-interest loan. Without the critical ability to repay stipulation remaining intact, payday lenders will continue to trap consumers in cycles of debt where borrowers take out new high-interest loans to pay off old loans again, and again.
"This reckless proposal was written by and for the predatory payday loan lobby and could potentially shove millions of Americans into the debt trap," said Jeremy Funk, spokesman for Allied Progress."While it's anathema to CFPB's mission of protecting consumers, it's obvious why the Trump administration is pursuing it. This is payback – pure and simple – for the nearly $2 million in support the payday lending industry has showered on Trump's campaign and his inauguration fund, not to mention for hosting a major conference at a Trump resort. It's as blatant a quid pro quo as you will find, but it's only Monday for the Trump administration."
Payday Lenders Are Reaping Rewards From Their Early Endorsement Of Kathy Kraninger And Financial Support Of Donald Trump
Kathy Kraninger's CFPB Is Expected To Gut Its Payday Lending Rule By Weakening Ability-To-Repay Provisions.
Kathy Kraninger's CFPB Is Expected To Gut Its Payday Lending Rule By Revisiting Ability-To-Repay Provisions Requiring Payday Lenders To Verify Borrowers' Income And Ability To Repay Credit.
Kathy Kraninger's CFPB Is Expected To "Gut The Centerpiece" Of Its Payday Lending Rule, "The Ability-To-Repay Provisions In The 2017 Small-Dollar Lending Rule Issued Under Former Director Richard Cordray." "The Consumer Financial Protection Bureau is expected to eliminate underwriting requirements in a highly anticipated revamp of its payday lending rule, according to sources familiar with the bureau's proposal. The CFPB in October signaled its interest in 'revisiting' the ability-to-repay provisions in the 2017 small-dollar lending rule issued under former Director Richard Cordray. But sources familiar with the agency's thinking say the CFPB — now led by Trump appointee Kathy Kraninger — has concluded the best approach is to remove those provisions altogether. Under the current rule, which has not yet gone fully into effect, lenders must verify a borrower's income as well as debts and other spending, to assess one's ability to repay credit while meeting living expenses. Such a course would gut the centerpiece of a rule that consumer advocates had hailed as a preventive measure against spiraling debt for consumers who rely on short-term credit." [Kate Berry, "CFPB to scrap key underwriting portion of payday rule," American Banker, 01/14/19]
Community Financial Services Association Of America (CFSA), The Payday Industry's National Interest Group, Endorsed Kathy Kraninger Shortly After She Was Nominated.
The Community Financial Services Association of America (CFSA) Said It Looked Forward To Working With Kathy Kraninger Shortly After Her Nomination Was Announced. On June 18, 2018, the Community Financial Services Association of America (CFSA) said in a press release, "CFSA congratulates Kathy Kraninger on her nomination to serve as CFPB Director. […] Since its creation, the Bureau's agenda has been guided by partisan politics, which has led to harmful, biased rulemaking – notably its rulemaking that led to the Bureau's seriously flawed small-dollar lending rule. CFSA looks forward to working with Ms. Kraninger as the Bureau reconsiders – and hopefully repeals – this severely flawed rule." [Press Release, Community Financial Services Association of America, 06/18/18]
The Community Financial Services Association Of America (CFSA) Is A Payday Lending Interest Group. "The Community Financial Services Association of America, an interest group that represents the payday loan industry, is hosting its four-day annual conference in April 2018 at Donald Trump's 90-hole golf resort 12 miles west of downtown Miami." [Alex Daugherty, "Payday lenders, with major business before Trump, to hold conference at Trump Doral,"Miami Herald, 11/08/17]
The Office Of Management And Budget (OMB) Confirmed Kathy Kraninger's Nomination On June 18, 2018, The Same Day CFSA Announced Its Support. "President Trump will nominate Office of Management and Budget (OMB) official Kathy Kraninger to be the next director of the Consumer Financial Protection Bureau (CFPB), the White House said […] White House deputy press secretary Lindsay Walters confirmed Trump's choice of Kraninger, an associate director at OMB," [Sylvan Lane, "Trump to nominate budget official as next consumer bureau chief," The Hill, 06/18/18]
Payday Lenders Held Their 2018 National Conference At Donald Trump's Resort In Miami, Florida.
The Community Financial Services Association Of America (CFSA) Held Its 2018 Annual Conference At Trump National Doral In Miami, Florida.
In April 2018, The Community Financial Services Association Of America, A Payday Lending Interest Group, Hosted Its Annual Conference At Trump National Doral In Miami, Florida. "The Community Financial Services Association of America, an interest group that represents the payday loan industry, is hosting its four-day annual conference in April 2018 at Donald Trump's 90-hole golf resort 12 miles west of downtown Miami." [Alex Daugherty, "Payday lenders, with major business before Trump, to hold conference at Trump Doral,"Miami Herald, 11/08/17]
Payday Lenders Contributed Over $2.2 Million To Donald Trump's Inauguration And Political Committees.
Payday Industry Donors Contributed Over $1.2 Million To Donald Trump's Inauguration
Roderick Aycox Of Select Management Resources Contributed $1 Million To Donald Trump's 2017 Inauguration. ["Trump 2017 Inauguration Donors," Center for Responsive Politics, accessed 12/03/17]
Advance America Cash Advance Centers Contributed $250,000 To Donald Trump's 2017 Inauguration. ["Trump 2017 Inauguration Donors," Center for Responsive Politics, accessed 12/03/17]
Checks Into Cash, Inc. Contributed At Least $25,000 To Donald Trump's 2017 Inauguration. ["Trump 2017 Inauguration Donors," Center for Responsive Politics, accessed 12/03/17]
Payday Industry Donors Contributed Over $1 Million To Donald Trump's Political Committees
Michael Hodges, Chairman Of Harpeth Financial, Contributed At Least $193,100 To Trump's Presidential Committees.
In 2017, Michael Hodges, chairman of Harpeth Financial, contributed at least $35,000 to the Trump Victory committee, a joint fundraising committee. [FEC Search for Trump Victory, 2017, accessed 11/13/17]
In 2016, Michael Hodges, chairman of Harpeth Financial, contributed at least $150,000 to the Trump Victory committee, a joint fundraising committee. [FEC Search for Trump Victory, 2016, accessed 11/13/17]
In 2017, Michael Hodges, chairman of Harpeth Financial, contributed at least $5,400 to Donald J. Trump for President committee. [FEC Search for Donald J. Trump for President, 2017-2018, accessed 11/13/17]
In 2016, Michael Hodges, chairman of Harpeth Financial, contributed at least $2,700 to Donald J. Trump for President committee. [FEC Search for Donald J. Trump for President, 2016, accessed 11/13/17]
Roderick Aycox, CEO Of Select Management Resources, And His Wife Contributed At Least $702,000 To Trump's Presidential Committees.
In 2016, Roderick Aycox, CEO of Select Management Resources, contributed at least $350,000 to Trump Victory Committee, a joint fundraising committee. [Search for Trump Victory, 2016, Federal Election Commission, accessed 11/13/17]
In 2016, Leslie Vail Aycox contributed at least $350,000 to Trump Victory Committee, a joint fundraising committee. [Trump Victory Schedule A, Federal Election Commission, 10/28/18]
In 2016, Roderick Aycox, CEO of Select Management Resources, contributed at least $2,700 to Donald J. Trump for President committee. [Search for Donald J. Trump for President, 2016, Federal Election Commission, accessed 11/13/17]
Executives Of Jones Management Group Contributed At Least $86,700 To Trump's Presidential Committees.
In 2016, Allan Jones, CEO of Jones Management Group, contributed at least $5,400 to Donald J. Trump for President committee. [Search for Donald J. Trump for President, 2016, Federal Election Commission, accessed 11/13/17]
In 2016, Allan Jones, CEO of Jones Management Group, contributed at least $80,400 to Trump victory committee, a joint fundraising committee. [Search for Trump Victory, 2016, Federal Election Commission, accessed 11/13/17]
In 2016, William Jones, VP of Jones Management Group, contributed at least $400 to Donald J. Trump for President committee. [Search for Donald J. Trump for President, 2016, Federal Election Commission, accessed 11/13/17]
In 2016, William Jones, VP of Jones Management Group, contributed at least $500 to Trump Make America Great Again Committee, a joint fundraising committee. [F Search for Trump Make America Great Again Committee, 2016, Federal Election Commission, accessed 11/13/17]
Ian Mackechnie, An Executive For Amscot Financial, Contributed At Least $2,700 To Donald J. Trump For President Committee.[FEC Search for Donald J. Trump for President, 2016, Federal Election Commission, accessed 11/13/17]
Robert Zeitler, CEO Of PH Financial Services, Contributed At Least $1,860 To Trump's Presidential Committees.
Robert Zeitler, CEO of PH Financial Services, contributed at least $900 to Trump Make America Great Again Committee, a joint fundraising committee. [Search for Trump Make America Great Again Committee, 2016, Federal Election Commission, accessed 11/13/17]
Robert Zeitler, CEO of PH Financial Services, contributed at least $960 to Donald J. Trump for President, Inc. [Search for Donald J. Trump for President, Inc., 2016, Federal Election Commission, accessed 10/29/18]
Eves Greyson, An Accountant For Community Choice Financial, Contributed At Least $450 To Trump Presidential Committees.
Eves Greyson, an accountant for Community Choice Financial, contributed at least $200 to Donald J. Trump for President committee. [Search for Donald J. Trump for President, 2016, Federal Election Commission, accessed 10/29/18]
Eves Greyson, an accountant for Community Choice Financial, contributed at least $250 to Trump Make America Great Again Committee, a joint fundraising committee. [Search for Trump Make America Great Again Committee, 2016, Federal Election Commission, accessed 10/29/18]
NCP Finance Ohio Contributed At Least $25,000 To Great America PAC, A Pro-Trump PAC.[Search for Great America PAC, 2016, Federal Election Commission, accessed 11/13/17]
Under Mick Mulvaney, The CFPB Teamed Up With Payday Lenders To Weakened Rules That Industry Didn't Like.
Mick Mulvaney's CFPB Delayed The Prepaid Card Rule Based Primarily On Industry's Concerns…
In January 2018, Mick Mulvaney's CFPB Delayed The Implementation Of The Prepaid Card Rule To April 2019. "The Consumer Financial Protection Bureau (Bureau) announced… that it has finalized updates to its 2016 prepaid rule. The Bureau's 2016 prepaid rule put in place requirements for treatment of funds on lost or stolen cards, error resolution and investigation, upfront fee disclosures, access to account information, and overdraft features if offered in conjunction with prepaid accounts. The changes announced [in January 2018] adjust requirements for resolving errors on unregistered accounts, provide greater flexibility for credit cards linked to digital wallets, and extend the effective date of the rule by one year to April 2019." [Press Release, Consumer Financial Protection Bureau, 01/25/18]
"The Rule Aims To Give Consumers Who Use Prepaid Cards Protections Similar To Those For Debit Cards And Credit Cards, Including Fee Disclosures And Protection Against Loss And Theft."[Yuka Hayashi, "Trump Administration Delays Prepaid-Card Rule by a Year," The Wall Street Journal, 01/25/18]
Mulvaney's CFPB Specifically Cited Industry Concerns When It Agreed To Delay The Rule. "The industry complained that the rule was too broad and could leave them on the hook for fraudulent losses. Now, the CFPB says it will give the industry more flexibility on cards linked to digital wallets, such as PayPal and Google Wallet. It will also give prepaid card providers more time to investigate claims before refunding money customers say they have lost to fraud. The CFPB, citing concerns that the industry needs more time to comply, said the rules would now go into effect in April 2019." [Renae Merle, "Consumer watchdog delaying new prepaid card protections by one year," The Washington Post, 01/25/18]
…And Then Teamed Up With Industry To Try And Delay Implementation of the Bureau's Payday Lending Rule.
In May 2018, Mick Mulvaney's CFPB Filed A Joint Motion With Payday Lending Industry Trade Groups To Delay Implementation Of The Payday Lending Rule. "The CFPB and the payday industry groups [The Community Financial Services Association of America and the Community Service Alliance of Texas] filed a joint motion May 31 to stay both the regulation and the litigation filed in April. A proposal to rewrite or repeal the existing payday rule would be introduced in February 2019, according to the motion." [Evan Weinberger, "CFPB Payday Rule Will Go Live Next Year, Judge Says," Bloomberg News, 06/10/18]
The Payday Lending Industry Objected To Many Of The Rules Requirements. "Payday lenders have balked at the rule's requirements, including a mandate that lenders determine a borrower's ability to repay a loan of 45 days or less. They also object to the rule's "lockout" periods for new loans, limits on rolling over loans and restrictions on electronically debiting borrower accounts to pay their debts." [Kate Berry, "CFPB goes back to the drawing board on payday rule," American Banker, 06/13/18]
Despite Both Sides Best Efforts, A Judge Denied The Request For a Delay Of The Rule's Effective Date. "The Consumer Financial Protection Bureau's payday lending regulations will take effect next year despite a request from the bureau and industry groups to delay its effective date while the rule is reworked. Judge Lee Yeakel of the U.S. District Court for the Western District of Texas on June 12 rejected a request from the CFPB, the Community Financial Services Association of America, and the Community Service Alliance of Texas to stay the effective date until 445 days after a new version of the rule is completed."[Evan Weinberger, "CFPB Payday Rule Will Go Live Next Year, Judge Says," Bloomberg News, 06/10/18]
Kathy Kraninger
Payday Rule