CFPB’s New Leader Helps Out Payday Lenders: The Fox is Guarding the Hen House
Last December, Senators Grassley and Ernst had a chance to stand against predatory payday lenders and stand with hardworking Iowans. Instead, Grassley and Ernst voted to confirm Kathy Kraninger to run the Consumer Financial Protection Bureau (CFPB), the federal regulator charged with policing Wall Street and predatory lenders.
After just two months on the job Kraninger is proposing to gut consumer protections against payday lending which Richard Cordray’s CFPB spent 5 years working to craft. Kraninger wants to eliminate a requirement that payday lenders confirm that a borrower can repay a loan while managing other expenses as well. The CFPB’s own research found that 80 percent of payday loans are taken out to pay back earlier payday loans.
She isn’t doing this because they are popular, as payday lenders are despised by Democratic and Republican voters alike. Payday lending costs Iowans millions of dollars per year, and the average payday loan-consumer in Iowa has taken out 20 or more, usually just to pay back their earlier debts.
If there was ever a time for Grassley and Ernst to stand up for working Iowans, it was in December when considering who would head the CFPB. And now that Kraninger is pushing to let payday lenders operate like it’s the Wild West, Grassley and Ernst could speak out against the proposal.
But so far not a peep. Thankfully we have a chance to weigh in, as the CFPB has a comment period before they make a final decision. Please submit a comment. And then, let Grassley and Ernst know that they missed a chance to stand with everyday Iowans by confirming someone who would rather protect predatory loan sharks than their victims.