Consumer Watchdog’s Latest Budget Request: $0

Consumer Watchdog’s Latest Budget Request: $0

2018-01-18 19:53:56

On Tuesday, Mr. Mulvaney announced that the agency would reconsider a rule it adopted last year that would tightly limit short-term payday loans. But unwinding or significantly altering the rule, which took the bureau five years to develop, requires a lengthy administrative process, which the bureau has not yet formally begun.

On Thursday, the consumer bureau moved to end a case it initiated last year against four payday lenders that it said had deceived consumers by charging illegally high rates.

The four companies are affiliated with the Habematolel Pomo tribe, which has argued that it is not governed by state laws and should not have to comply with state usury rules. The tribe, based in Upper Lake, Calif., fought the agency’s lawsuit and denied any wrongdoing.

The bureau filed a one-line notice in United States District Court in Kansas seeking to dismiss its lawsuit. In a written statement, the bureau declined to comment on its reason for dropping the case.

Mr. Mulvaney also said this week that the bureau would soon seek public comments on the way it gathers information during its investigations. Last month, Mr. Mulvaney criticized that information-gathering process, calling it “fairly broad and fairly burdensome.”

None of those actions has an immediate effect on the bureau’s operations, but consumer groups expressed frustration with the approach that they signal.

“So far this week the acting director has announced plans to gut the payday lending rule, asked big banks and Wall Street special interests how they would like to destroy the agency from the inside, and now he’s screwing with its funding,” said Karl Frisch, executive director of Allied Progress, a consumer group. “What he hasn’t done is offer one announcement about actions taken to protect consumers.”

Industry groups, on the other hand, welcomed the more relaxed approach from a regulator they have long criticized as overly aggressive.

Richard Hunt, chief executive of the Consumer Bankers Association, praised Mr. Mulvaney’s call for comments on the agency’s enforcement process. Many of the bureau’s actions “certainly warrant a thorough review,” he said.

Continue reading the main story

Original Source