CFPB's New Leader Helps Out Payday Lenders: The Fox is Guarding the Hen House

Last December, Senators Grassley and Ernst hada chance to stand against predatory payday lenders and stand with hardworkingIowans. Instead, Grassley and Ernst voted to confirm Kathy Kraninger to run theConsumer Financial Protection Bureau (CFPB), the federal regulator charged withpolicing Wall Street and predatory lenders.

After just two months on the job Kraninger is proposing to gut consumer protections against payday lending which Richard Cordray’s CFPB spent 5 years working to craft. Kraninger wants to eliminate a requirement that payday lenders confirm that a borrower can repay a loan while managing other expenses as well.  The CFPB’s own research found that 80 percent of payday loans are taken out to pay back earlier payday loans.

She isn’t doing this because they are popular,as payday lenders are despised by Democratic and Republican voters alike.Payday lending costs Iowans millions of dollars per year, andthe average payday loan-consumer in Iowa has taken out 20 or more, usually justto pay back their earlier debts.

If there was ever a time for Grassley andErnst to stand up for working Iowans, it was in December when considering whowould head the CFPB. And now that Kraninger is pushing to let payday lendersoperate like it’s the Wild West, Grassley and Ernst could speak out against theproposal.

But so far not a peep. Thankfully we have achance to weigh in, as the CFPB has a comment period before they make a finaldecision. Please submit a comment. And then,let Grassley and Ernst know that they missed achance to stand with everyday Iowans by confirming someone who would ratherprotect predatory loan sharks than their victims.