The Trump Administration has been openly hostile to Consumer Financial Protection Bureau and recently proposed massive cuts in the new budget. Director Mick Mulvaney was viewed as an appointment designed to dismantle the consumer protection agency. Now, as NPR reported, Mulvaney has ordered the dropping of the case against Golden Valley Lending which alleged charged consumers up to 950 percent interest rates. The Administration owes the public a full explanation for this decision. There may be a reason (such as deferring to state prosecution) but the decision on its face is troubling.
In a prior memo, Mulvaney was highly critical of the aggressive stance taken by the bureau and insisted that the bureau needed to protect financial-services companies as well as citizens. While Mulvaney insisted that “professional career staff” made the decision, media sources said it was Mulvaney who pushed to drop the case.
I believe that there were good-faith objections to the lack of congressional control over the CFPB but this decision is baffling given the almost confiscatory rates imposed by Golden Valley.
Golden Valley Lending, Inc., Silver Cloud Financial, Inc., Mountain Summit Financial, Inc., and Majestic Lake Financial, Inc. were all targeted for predatory online loans offers. Golden Valley Lending and Silver Cloud Financial offered online loans of between $300 and $1,200 with annual interest rates ranging from 440 percent up to 950 percent. These rated violated state law and were allegedly based on deceptive practices.
For example, Julie Bonenfant, 27, a Michigan resident reported that she took out a $900 loan from Golden Valley, but in less than 12 months, she was hit with payments of $3,735. That is quite shocking on its face.