The Trump administration is looking to reverse an Obama rule so payday loan companies can exploit Americans who live paycheck to paycheck with exorbitant rates.
Loan sharks who extract money from the working poor at some of their most desperate moments are on the verge of receiving yet another break from the Trump administration.
The Trump team’s recent takeover of the Consumer Financial Protection Bureau (CFPB) has them considering rolling back a rule that clamps down on payday lenders, put in place by the Obama administration.
The rule requires lenders to consider whether borrowers can afford to pay back a loan with interest within 30 days, considering the weight of their monthly expenses. Before the rule, lenders could roll loan on top of loan as the debt accumulated into obligations costing 300 percent or more for some, described as a “debt trap.”
Under the Trump team, the rule that was set to begin this week is under reconsideration another instance of the wealthy and powerful getting a leg up from Trump at the expense of the vulnerable.
Richard Cordray, the previous head of the agency who was put in place by Obama, slammed the decision as “shameful,” adding, “Never mind many thousands of people stuck in debt traps all over the country. Consumers be damned!”
Sen. Sherrod Brown (D-OH) described the action as “an attack on working families,” and said the Trump administration was “busy unraveling important consumer protections for payday borrowers.”
Karl Frisch, executive director of Allied Progress, a group that has fought for limits on payday lenders, said the decision showed the Trump team is “more concerned with the needs of payday lenders than you are with the interests of the consumers these financial bottom-feeders prey upon.”
Mick Mulvaney, Trump’s director of the Office of Management and Budget, is currently in charge of CFPB and has quickly begun working to move the agency from working for consumers to working against their interests.
When Mulvaney served in Congress, he received thousands of dollars in donations from the payday loan industry. In a briefing with reporters last year, Mulvaney claimed the money would not influence his decision-making.
Now, he is doing exactly what his benefactors in the industry want.
The Trump administration is working against the American people. It has made it easier for nursing homes to abuse the elderly, has fought to force families of Medicaid recipients to face even higher financial burdens, and has sought to enshrine bigotry within the military.
Letting loan sharks take poor families to the cleaners is not a deviation from Trump’s beliefs and mindset; it is the natural outcome of his approach to the world.