To celebrate her plan to gut consumer protections around payday loans, Percy the Payday Loan Shark stopped by the Consumer Financial Protection Bureau on Wednesday to deliver a thank-you card to Kathy Kraninger, the agency’s director. While security personnel blocked Percy from entering the CFPB foyer, he made sure that Kraninger heard about his gratitude for the policies on payday lending that she is advancing.
To Percy’s chagrin, he was accompanied by representatives from Stop The Debt Trap, a coalition of civil rights, consumer, labor, faith, veterans, seniors and community organizations from all 50 states who oppose Kraninger’s effort to repeal the consumer protections. These advocates delivered a letter signed by 429 organizations telling the CFPB to stand by their prior policies and protect consumers from predatory lenders.
“If Kathy Kraninger manages to slash the ability-to-repay rule, payday loan sharks like me will sink our teeth into $7 billion more in profits every year!” Percy said. “It’s so nice to know that Kraninger understands what kind of policy we need. I just love charging borrowers up to 900% APR!”
(There is video of Percy’s trip to the CFPB here.)
Former CFPB Director Richard Cordray finalized the ability-to-repay rule in 2017 after five years of study. It would require lenders to verify that any client is capable of repaying their loans on time, thus preventing payday lenders from trapping vulnerable consumers in a cycle of debt. It was set to take effect in August of this year.
President Donald Trump’s temporary appointee to the CFPB, Mick Mulvaney, took multiple steps to block the rule from being implemented. In February, Kraninger made a more dramatic move, proposing to eviscerate the rule’s central provision — a requirement that lenders assess a borrower’s ability to repay a loan before making it. As consumer advocates wrote in a 220-page takedown of Kraninger’s plan, the evidence hasn’t changed, only the CFPB leadership has.
Payday lenders are partying under the Trump administration. For the past two years, a major trade group for payday lenders has thrown a conference and party at the Trump National Doral resort in Miami. Payday lenders also contributed $2.5 million toward Trump’s election and inaugural committees.
Although Percy was rebuffed on Wednesday, he’s confident that his message about how helpful gutting the payday rule is to him and his fellow payday loan sharks is being heard loud and clear.
“Everything’s going swimmingly for us predatory lenders,” Percy said. “If Director Kraninger carries through her plan, we can look forward to continuing to profit by hurting vulnerable people and families.”