Regulation

Lawmakers Demand Answers From CFPB On Payday Rule

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Mick Mulvaney, the acting director of the Consumer Finance Protection Bureau, received questions from Senator Elizabeth Warren of Massachusetts, the head Democrat on the House Financial Services Committee and Rep. Maxine Waters of California as to why new payday laws aren’t being implemented.

According to American Banker, in a letter sent to Mulvaney by Warren and Waters and signed by an additional four Democrats, the lawmakers called for answers as to why the CFPB is suddenly changing its stance when it comes to the payday rule. “We have a number of questions about the sudden reversal of the CFPB’s positions,” the letter stated.

Mulvaney said earlier this month that the CFPB was mulling whether or not to move forward with the new rule as it currently stands. It then dismissed a case the CFPB (under former director Richard Cordray) brought against lenders who require borrowers to make installment payments, and last week dropped an inquiry into World Acceptance Corp. practices. Sens. Richard Blumenthal and Jeff Merkley and Reps. Al Green and Keith Ellison were the four other Democrats to sign the letter.

“The agency barely explained its payday rule reversal,” said the letter, which was also addressed to Leandra English, the chief of staff for Cordray who sued Mulvaney after he took over her role of acting director once Cordray departed. In December, Mulvaney was quoted by reporters as saying there wasn’t much he could do at the CFPB to stop the payday rule from becoming official, and that it would take an act of Congress. The lawmakers want to know what has changed since then, and who has been advising Mulvaney to change the Bureau’s stance. They also want detailed information on any meetings held with his staff to discuss the payday rule.

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