Listen to the Episode
That left a patchwork: 15 states in which payday loans were banned outright, a handful of states with strong enforcement – and large swaths of the country in which payday lending was mostly unregulated.
Then, almost as suddenly as an aggressive CFPB emerged, the Trump administration arrived with an agenda of undoing regulations. There was a resurgence of hope in the industry, which seems to be justified, at this point, said Jeremy Rosenblum, a partner at law firm Ballard Spahr, who represents payday lenders. Rosenblum spoke to ProPublica and WNYC in a conference room at the Doral – filled with notepads, pens and little bowls of candy ily crest – where he had just led a session on compliance with federal and state laws. There was a profound sense of relief, or hope, for the first time. (Ballard Spahr occasionally represents ProPublica in legal matters.)
In Mick Mulvaney, who Trump appointed as interim chief of the CFPB in 2017, the industry got exactly the kind of person it had hoped for. As a congressman, Mulvaney had famously derided the agency as a sad, sick joke.
If anything, that phrase undersold Mulvaney’s attempts to hamstring the agency as its chief. He froze new investigations, dropped enforcement actions en masse, requested a budget of $0 and seemed to mock the agency by attempting to officially re-order the words in the organization’s name.
But Mulvaney’s rhetoric sometimes exceeded his impact. His budget request was ignored, for example; the CFPB’s name change was only fleeting. And besides, Mulvaney was always a part-timer, fitting in a few days a week at the CFPB while also heading the Office of Management and Budget, and then moving to the White House as acting chief of staff.
It’s Mulvaney’s successor, Kraninger, whom the financial industry is now counting on – and the early signs suggest she’ll deliver. In addition to easing rules on payday lenders, she has continued Mulvaney’s policy of ending supervisory exams on outfits that specialize in lending to the members of the military, claiming that the CFPB can do so only if Congress passes a new law granting those powers (which isn’t likely to happen anytime soon). She has also proposed a new regulation that will allow debt collectors to text and email debtors an unlimited number of times as long as there’s an option to unsubscribe.
Enforcement activity at the bureau has plunged under Trump. The amount of monetary relief going to consumers has fallen from $43 million per week under Richard Cordray, the director appointed by Barack Obama, to $6.4 million per week under Mulvaney and is now $464,039, according to an updated analysis conducted by the Consumer Federation of America’s Christopher Peterson, a former special adviser to the bureau.
Kathleen Kraninger testifies during her confirmation hearing in .
Kraninger’s disposition seems almost the inverse of Mulvaney’s. If he’s the self-styled right wing paydayloanscalifornia.net/cities/long-beach/ nutjob willing to blow up the institution and everything near it, Kraninger offers positive rhetoric – she says she wants to empower consumers – and comes across as an amiable technocrat. At 44, she’s a former political science major – with degrees from Marquette University and Georgetown Law School – and has spent her career in the federal bureaucracy, with a series of jobs in the Transportation and Homeland Security departments and finally in OMB, where she worked under Mulvaney. (In an interview with her college alumni association, she hailed her Jesuit education and cited Pope Francis as her dream dinner guest.) In her previous jobs, Kraninger had extensive budgeting experience, but none in consumer finance. The CFPB declined multiple requests to make Kraninger available for an interview and directed ProPublica and WNYC to her public comments and speeches.
Kraninger is new to public testimony, but she already seems to have developed the politician’s skill of refusing to answer difficult questions. At a hearing in March just weeks before the Doral conference, Democratic Rep. Katie Porter repeatedly asked Kraninger to calculate the annual percentage rate on a hypothetical $200 two-week payday loan that costs $10 per $100 borrowed plus a $20 fee. The exchange went viral on Twitter. In a bit of congressional theater, Porter even had an aide deliver a calculator to Kraninger’s side to help her. But Kraninger would not engage. She emphasized that she wanted to conduct a policy discussion rather than a math exercise. The answer, by the way: That’s a 521% APR.
