Curo Group, one of the largest payday lenders in the U.S., went public on the stock market with a valuation of $620 million. According to a report in the Financial Times, the lender – which goes after underbanked consumers or those who aren’t represented by traditional banks – is counting on the Trump White House and a Republican-led Congress to ease some of the regulations placed on the payday lending market.
Shares of the company, which is backed by private equity firms, were priced at $14 per share on Wednesday night (Dec. 6) and closed up 1.4 percent in trading on Thursday (Dec. 8), the first day of trading for Curo Group as a public company.
The IPO comes at a time when payday lenders are under attack from consumer advocates, but supporters of the industry say these lenders provide funds for workers who would otherwise have a hard time borrowing money. The Consumer Financial Protection Bureau had been going after the industry under former head Richard Cordray, but it's not clear what acting CFPB head Mick Mulvaney will do. Mulvaney has long been an outspoken critic of the government watchdog.
Given that there aren’t many publicly traded payday lenders, the Financial Times noted that Curo will serve as a barometer for how upbeat investors are about the CFPB’s plans getting tossed out, watered down or delayed.
The CFPB, which has said payday lenders hurt borrowers with high-interest rates, would require the lenders to ensure that borrowers can afford to pay back the loans before giving them the money. Curo, which charges as high as $25 for every $100 it lends, has said that the rule would hurt the company if instituted. The company raised $93 million by selling a 15 percent stake in the float, noted the report.