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April 12, 2018 | CFSA Commentary
Mick Mulvaney Is Right To Reform CFPB
By Dennis Shaul
The Consumer Financial Protection Bureau (CFPB) was created to look out for the best interests of American consumers, but former director Richard Cordray and the heavy hand of partisan influence led it astray. Rather than rely on independent research and data to guide its rulemaking, the bureau was guided by a political agenda.
Acting Director Mick Mulvaney is right to move to reform the bureau and separate it entirely from partisan politics. Only then can it become the independent agency Congress envisioned.
The CFPB small-dollar lending rule is a prime example of the bureau’s partisanship run amok.
The Community Financial Services Association of America filed a lawsuit against the bureau for crafting its rule in a flawed process based on a pre-determined, partisan agenda. The lawsuit asserts that the bureau failed to demonstrate consumer harm from small-dollar loans, ignored unbiased research and data, relied on flawed information to support its rulemaking, and disregarded the Administrative Procedure Act and Small Business Regulatory Enforcement Fairness Act.
The nearly 1,700-page rule goes much further than simply requiring lenders to determine a customer’s ability to repay — it effectively eliminates businesses that provide a much needed source of credit. That is the rule’s true objective
More than one million small-dollar loan customers opposed the rule, but the CFPB ignored the concerns of the very people who will be most impacted. The rule as written will leave millions of Americans with no choice but to seek out dangerous alternatives such as unscrupulous, unlicensed, offshore or otherwise illegal lenders.
Fortunately, the new CFPB leadership has decided to reconsider this rule and re-examine the workings of the bureau. During this re-examination, the bureau should listen to consumers and work towards achieving the delicate balance of enhancing consumer protections while at the same time preserving access to credit for millions of Americans.
Dennis Shaul is the CEO of the Community Financial Services Association of America, which represents non-bank lenders offering small-dollar loans.
Read more via USA TODAY.