CFPB under Mulvaney drops payday loan case
Some former CFPB lawyers fear that under Mulvaney, the agency’s mission is being eroded.
Now that he’s in charge of the Consumer Financial Protection Bureau, Trump appointee Mick Mulvaney has decided not to sue one payday loan collector and is considering dropping cases against three others.
Reuters reports that Mulvaney, named by Trump as interim head of the CFPB to replace Richard Cordray, who resigned in November, has abandoned that case, one of four approved for litigation by Cordray before he left the agency.
The report cited five people with direct knowledge of the matter saying that the four previously unreported cases aimed to return more than $60 million to consumers. They also said that three are part of routine CFPB work to police storefront lenders, while the fourth concerns who has a right to collect payday loans offered from tribal land.
Cordray was prepared to sue Kansas-based National Credit Adjusters, which primarily collects debt for online lenders operating on tribal land. Such lenders, according to the report, charge triple-digit interest rates that are prohibited in many states, but the companies have argued such loans are permitted when they are originated on tribal land. The CFPB under Cordray, on the other hand, concluded that NCA had no right to collect on such online loans, no matter where they were made.
Mulvaney, for his part, has dropped the matter and the case is “dead,” Sarah Auchterlonie, a lawyer for NCA, told Reuters. She also said that the CFPB seems to be backing off issues involving tribal sovereignty.
According to the CFPB public database, consumer complaints against NCA include having received threats to have them jailed and to sue family members.
The other three cases, against Security Finance, Cash Express LLC and Triton Management Group, located in southern states where high-interest loans are allowed, were over alleged violations of customer rights when attempting to collect, as well as other issues.
According to the report, spokespeople for the companies declined to comment, and a spokesman for the CFPB did not respond to a request for comment. None of the sources, it added, wished to be identified because they are not authorized to speak about the cases
Some former CFPB lawyers fear that under Mulvaney, the agency’s mission is being eroded. The report quotes Joanna Pearl, former enforcement attorney, saying, “The CFPB is supposed to create a level playing field for consumers. I’m not sure Mulvaney sees it like that.”