Trump appointees at federal consumer watchdog agency manipulated data to benefit the very rich and powerful payday lending industry, a former staffer who worked at the agency for seven years as an economist says. Payday lending is a $40 – $90 billion industry that has donated heavily to Donald Trump. Multiple reports detail the millions of dollars the industry has showered on President Trump and the GOP.
“Last summer, on his final day of work at the nation’s consumer finance watchdog agency, a career economist sent colleagues a blunt memo” The New York Times reports. “He claimed that President Trump’s appointees at the Consumer Financial Protection Bureau had manipulated the agency’s research process to justify altering a 2017 rule that would have sharply curtailed high-interest payday loans.”
In his 14-page memo the economist, Jonathan Lanning, accused Trump loyalists installed in the agency of engaging in maneuvers, The Times says, “that he considered legally risky and scientifically indefensible, including pressuring staff economists to water down their findings on payday loans and use statistical gimmicks to downplay the harm consumers would suffer if the payday restrictions were repealed.”
The Times notes Trump’s efforts “to dismantle the payday regulation began with the arrival of Mick Mulvaney, the Trump administration budget chief, who was appointed the C.F.P.B.’s acting director in late 2017. Among his priorities was to delay, and eventually undo, the Obama-era payday lending restrictions, which were scheduled to take effect in summer 2019, according to two former senior bureau officials who discussed the issue with him.”
A 2018 International Business Times article, “Trump And Lawmakers Got Cash From Payday Lenders, Then Weakened Lending Rules,” explained what some might say sounds like a quid pro quo process.
"Less than two months after President Donald Trump tapped his budget director to run the independent federal agency tasked with protecting U.S. consumers from harmful and predatory financial practices, the agency has moved to undo a rule intended to prevent payday lenders from preying on low-income Americans,” IBT reported.
Since 2015, “payday lenders have given $1.5 million to congressional lawmakers and another $300,000 to the Republican National Committee and the National Republican Congressional Committee. The industry also spent another $6.2 million on politics at the state level to combat regulation over the same time period,” IBT added.
“The industry’s shrewdest investment may have been the money it delivered to Trump after he won the 2016 election. While payday lenders weren’t lining up to support Trump during the presidential election, in January after Trump’s win, Advance America, the nation’s biggest payday lender, donated $250,000 to Trump’s inauguration. Title loan magnate Rod Aycox and his wife each donated $500,000 for the event; payday lender Checks into Cash chipped in another $25,000. In November, the Community Financial Services Association of America, the industry’s trade group, announced its annual conference and expo would be held at the Trump National Doral resort in Miami.”
An in a damning observation, IBT added: “As that money flowed to Trump and his business empire, the Trump administration has made moves to help the industry — in particular, it took decisive action to undermine the CFPB’s previous efforts to regulate lenders.”
The New York Times notes, “This week, the agency is expected to release the revised payday rule, which will no longer require lenders to assess whether customers can afford their fees before offering a loan.”
Read the full New York Times article here.