The CFPB once defended consumers. Thanks to Trump, it now helps companies prey on them instead

For two days this week, Consumer Financial Protection Bureau Director Kathy Kraninger testified to Congress about protecting consumers during the coronavirus pandemic, first in the Senate and then in the House. It went about as well as could be expected, which is not particularly well at all. Kraninger, a thoroughly unqualified Trump appointee, has shown little interest in doing her purported job, which is protecting Americans from the financial services industry. Rep. Nydia M. Velázquez (D-N.Y.) said she lacked empathy, while Sen. Elizabeth Warren (D-Mass.) demanded she resign.

Kraninger’s main accomplishment since the start of the covid-19 pandemic has been the loosening of regulations on payday loans. Previously, regulations stopped people who couldn’t afford to repay the loans from taking them on, because borrowers seeking short-term relief instead often found themselves trapped in a cycle of quickly rising debt. Annual interest on payday loans can run above 500 percent.

When queried as to why she loosened regulations on payday loans, Kraninger said that consumers are showing a lot of interest in them. That’s quite possibly true, given that at least 1 million people have filed for unemployment every week since mid-March, but hardly the point of Kraninger’s critics, who believe payday loans are exploitative products that prey on the financially desperate. Continue reading.