After Killing Lawsuits, Industry Pal Running CFPB Claims Payday Investigation Still Open


A Trump administration official currently playing multiple lead roles in the executive branch denied that he stopped the probe of a payday lender, despite dropping litigation against the company.

Mick Mulvaney told Sen. Chris Van Hollen (D-Md.) on Tuesday that “there is an ongoing investigation” into the firm, Golden Valley Lending.

Van Hollen had told Mulvaney he wanted to “follow up” with him on the decision to stop the Consumer Financial Protection Bureau lawsuit. The interim agency director replied, claiming that there was still an ongoing investigation, saying: “It’s unlikely I’d be able to answer many of your questions.”

Last month, Mulvaney abruptly dropped CFPB litigation against Golden Valley. In late 2017, the top White House policy aide was appointed acting interim head of the agency by President Trump–in a move currently being challenged before the DC Circuit Court of Appeals.

On Tuesday, Mulvaney was testifying before the Senate Budget Committee in his capacity as the Director of the Office of Management and Budget. He was summoned to discuss the Trump administration’s fiscal year 2019 budget blueprint–effectively a meaningless document under any President, given Congressional authority over federal spending.

Other Democratic lawmakers have also been pressing Mulvaney to reveal details about the Golden Valley case.

In a letter sent two weeks ago, Sen. Elizabeth Warren (D-Mass.), Rep. Maxine Waters (D-Calif.), and four colleagues asked the interim CFPB director if he or other agency officials met “with representatives of the payday lending industry” ahead of the decision to drop litigation against Golden Valley and three other short-term lenders who charged annualized interest rates in the high triple-digits.

Mulvaney withdrew the CFPB from the cases amid a push to “reconsider the Payday Rule” while accepting “waiver requests,” as the lawmakers noted. The Obama-era regulations were crafted to make payday lenders confirm that borrowers are creditworthy before ensnaring them in debt.

The Democrats also noted that Mulvaney has benefited from $60,000 in payday loan industry campaign donations throughout his career. World Acceptance Corporation, one of the four firms that saw CFPB litigation dropped by Mulvaney, had given $4,500 to then-US Representative from South Carolina.

CFPB spokespeople first denied on Monday that Mulvaney was involved in the Golden Valley decision before walking back that claim–in interviews with NPR released the day before. Mulvaney confirmed that he played a role in the move, when pressed Tuesday by Van Hollen.

Sen. Jeff Merkley (D-Ore.) also used the Budget Committee hearing as an opportunity to question recent CFPB decisions, decrying Mulvaney as “having wiped out the payday loan rule.”

“Senator, I think it’s inaccurate to say we wiped out the Payday Rule,” Mulvaney replied.

Merkley, not convinced by the answer, accused the trusted White House operative of cowardice.

“When you’re so happy about having helped out the payday loan companies, why don’t you own it now? Why do you want to dodge the question?” the lawmaker asked.

“Again, senator, we’ve given notice that we’re taking additional comments for additional rulemaking,” Mulvaney answered.

“How about Equifax?” Merkley shot back.

The consumer credit rating agency admitted last year that hackers breached its servers, compromising the private information of over 140 million Americans, prompting then-CFPB Director Richard Cordray to launch an investigation. Earlier this month, Reuters reported that Mulvaney was dropping the inquiry.

“I can tell you, senator, that there’s been no change in the position from the previous leadership of CFPB regarding Equifax,” Mulvaney replied.

A quick glance at Cordray’s Twitter account, however, casts serious doubt on that claim.

“Just now seeing that CFPB pseudo-leadership may be pulling back from pursuing ongoing investigation of Equifax data breach that hurt tens of millions of Americans,” Cordray tweeted last week. The former agency head is currently running as a Democrat for Ohio Governor.

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Since 2010, Sam Knight's work has appeared in Truthout, Washington Monthly, Salon, Mondoweiss, Alternet, In These Times, The Reykjavik Grapevine and The Nation. In 2012, he worked as a producer for The Alyona Show on RT. He has written extensively about political movements that emerged in Iceland after the 2008 financial collapse, and is currently working on a book about the subject.


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