Mick Mulvaney, U.S. President Donald Trump’s pick to lead the CFPB intends to invalidate the payday rule asap.
In a significant development, a leading trade group for small-dollar lenders has asked a federal court to block rules that are meant to shield consumers from predatory loans.
As per rules issued in November 2017 by the Consumer Financial Protection Bureau, lenders are not allowed to lend money to borrowers who do not have the ability to repay the loans; further, lenders are not allowed to drain a borrower’s savings so as to settle the loan amount.
The Community Financial Services Association of America (CFSA) has asked the court to scrap these rules.
The group has argued that the payday lending rule “was motivated by a deeply paternalistic view that consumers cannot be trusted with the freedom to make their own financial decisions”.
Mick Mulvaney, President Donald Trump’s pick to lead the CFPB, has declared he intends to invalidate the payday rule as soon as possible.
The case was brought in the U.S. District Court for the Western District of Texas, Austin Division.