You may have seen the storefronts in low-income communities, with signs saying, “Checks Cashed.”
These signs don’t say that these “payday lenders” charge annual interest rates of 200 percent or more, tapping janitors, hospital orderlies, homecare aides and other low-wage workers in endless cycles of debt. Nor do they admit that these seemingly small businesses are often fronting for big banks.
Earlier this month, an Obama-era rule was set to kick in, protecting poor customers against exorbitant fees for “short-term loans” that suck them into repaying the interest over and over again. But, on that very day, Mick Mulvaney, President Trump’s new head of the Consumer Financial Protection Bureau, canceled the long-awaited rule.
In related actions, he has also announced that the CFPB was dropping its lawsuit against a group of payday lenders charging interest rates of almost 950 percent, while also halting its investigation of the subprime lender World Finance, which charges annual interest rates that could exceed 200 percent.
A former South Carolina congressman, Mulvaney is turning the CFPB—founded in the aftermath of the banking crisis of 2008—from a watchdog for consumers to a lapdog of the bankers. Why is Mulvaney supporting Wall Street over Main Street? One reason just might be that World Finance, which is headquartered in South Carolina, contributed $4,500 to his campaign fund.