Cfpb's War On Installment Loans Case Study

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The CFPB 's War on Installment Loans Hurts the Very People It Claims to Protect The CFPB 's War on Installment Loans Hurts the Very People It Claims to Protect
The Consumer Financial Protection Bureau’s war on installment loans disenfranchises the people that it’s charged with protecting according to a report posted at Investors.com. The agency not only exceeds its legislative mandate but also uses questionable tactics that generate de facto legislative actions by enforcing laws that have not been passed by any legislative body. The report calls for incoming President Trump to replace agency director Richard Cordray as soon as possible.

The Constitution prohibits passing laws that criminalize past behavior, but that’s exactly what the CFPB
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Democrats and the outgoing Obama administration continue to express support for the agency, so it’s unclear whether the Republican mandate will be enough to reform or abolish the agency. Many consumers have become trapped in debt, and some unethical lenders have targeted minorities and others for usurious loans.

Consumer Financial Protection Bureau Hurts the People Who Depend on Short-Term Loans
The CFPB charges that short-term, bad credit loans take advantage of poor people and others who aren’t sophisticated in how they manage credit. Fee.org reports that the agency intiated several proposals to regulate payday lending, online installment loans and other short-term loans that usually carry higher rates of interest than traditional loan products. The agency has unilaterally determined that these loans aren 't in consumers’ best interests because profitability depends on interest rates so high that they 're unaffordable for
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The agency doesn’t depend on congressional appropriations for financing its initiatives, and the director is in charge of both policy and enforcement, which critics contend concentrates too much power in one person. The director can choose to pursue services outside the agency’s mandate including banks, credit unions, auto finance companies and other financial services like retirement planning. Many Republicans are calling for President-elect Trump to fire Cordray on his first day in office, but there are potential legal problems. Cordray’s term doesn’t coincide with presidential

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