A day after President Donald Trump’s State of the Union address – where he called for expanding the middle class – his consumer agency said it wants to gut key protections that keep people from sliding deeper into poverty. The Consumer Financial Protection Bureau proposed revisions to the payday lending rule – so that lenders no longer have to verify the borrower’s ability to repay a loan without renewing it. Suzanne Martindale with Consumer Reports says this is a betrayal of the bureau’s core mission.
37 states have banned the triple-digit interest rates common in many payday and car-title loans – but in Missouri, rates can be an eye-popping 19-hundred fifty percent on some loans. The bureau ceased to be an independent agency once Trump gained the right to appoint the director. Since then, it put the payday rule on hold and then settled multiple exploitation cases against payday lenders with small fines. The administration argues that the change will allow the industry to expand and offer credit to additional needy consumers.