The former director of the Consumer Financial Protection Bureau (CFPB) blasted his successor in a series of tweets Wednesday for attempting to unwind the agency’s rule on payday lending.
Richard Cordray, the bureau’s first director, panned the CFPB’s plans as “truly shameful action by the interim pseudo-leaders” of the bureau, now overseen by Acting Director Mick Mulvaney.
“Let’s see the case be made, with full debate, on whether the zealots and toadies can justify repealing a rule to protect consumers against extortionate payday loans,” Cordray continued.
“Whenever the public has voted on this issue, it has always overwhelmingly sided against payday lenders.”
Cordray also called on President Trump to explain his opinion on the CFPB rule.
“Where’s @realDonaldTrump on protecting consumers against debt trap loans made at 391% interest rates or even higher?,” Cordray tweeted.
“Don’t hide on this one, Mr. President, come out and tell us where you stand. Give America a tweet and proudly stand up for payday lenders against consumers!”
The CFPB announced Tuesday that it would allow lenders subject to its 2017 rule on short-term, high-interest loans to apply for a delay to adhere to the rule’s first compliance deadline. It’s the first major step toward Mulvaney’s goal to unwind the CFPB’s aggressive regulation of the financial sector.
The CFPB rule, finalized last November, imposes limits on how frequently a lender can offer, collect on and extend high-interest loans with deadlines of only a few weeks. Supporters of the rule say it will help prevent shady lenders from trapping vulnerable consumers in a cycle of compounding debt. Critics say it eliminates crucial financing options for poor Americans in areas underserved by banks and credit unions.
Cordray, a Democrat and the bureau’s first director, resigned from the bureau to run for governor of Ohio. He left the bureau on Nov. 24, seven weeks after the payday rule was finalized.
President Trump appointed Mulvaney, the Office of Management and Budget director, as the CFPB’s acting chief later that day. Mulvaney, a staunch conservative who has opposed the CFPB’s existence, promised to unwind rules that he said were crippling the financial sector.
Mulvaney has since hired several staffers from the House Financial Services Committee and aides to the panel’s chairman, Rep. Jeb Hensarling (R-Texas), the architect of House efforts to reign in the CFPB.
Cordray said he expects Mulvaney to “hire new bureaucrats to shred years of analysis and kill it off stealthily” as Congress attempts to repeal the rule. A measure from House Republicans to repeal the rule seems likely to pass the House, but could face trouble in the Senate.
The former director also asked religious leaders who supported the bureau’s payday rule to speak out in favor of the regulation.