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A Trump policy misses his 'forgotten' Americans

By Clarence Page, Tribune Content Agency on

That message has come through good and hard as Mulvaney has acted to defang the agency's powers. Among other drastic actions in the past two months, the agency has put the brakes on a rule that would have put new limits on payday lenders and their high interest rates.

Then it abruptly dropped a lawsuit against an alleged online loan shark, Golden Valley Lending, which the lawsuit claimed has been illegally charging people up to 950 percent interest rates.

To agency staff who had been building that case for years, dropping it made about as much sense as Eliot Ness taking a pass on investigating Al Capone.

Well, OK. It was not quite that bad. But put yourself in the shoes of the alleged victims.

NPR financial reporter Chris Arnold found a familiar horror story in Julie Bonenfant, 27, who does administrative work for the city of Detroit. She was having a tough year, a breakup with her boyfriend, the theft of her car and she fell behind in her rent.

Facing eviction, she turned to Golden Valley Lending online. "It was just misleading," she said of the lender. "The way it was presented was ... I was going to make four large payments and then be done."

But she wasn't done, she said. Even after those four payments, the lender continued to deduct from her bank account. Payments for her $900 loan will total $3,735 after 12 months, or more than four times what she borrowed, NPR reported.

 

Her boss and CFPB lawyers determined the loan's terms to be "illegal" and the bureau sued in April for unfair, deceptive and abusive practices. A successful court action could result in a settlement that would claw back millions of dollars to others who are found to be victims. But just as the CFPB was preparing to go to court, Mulvaney's agency dropped the suit.

Some people see that as payback time, since Mulvaney as a congressman took $62,000 from payday lenders. "And now at the CFPB," said Karl Frisch, executive director of the consumer watchdog group Allied Progress, "he's doing their bidding."

But Bonenfant -- who took out that $900 loan -- sees it as something else: betrayal. A political betrayal. The ironic political twist to this story, she said, is "I actually voted for Trump."

"So knowing that his guy threw out this case that affects people like me, I feel kind of like stupid -- just kind of like betrayed."

I share her anger. Mogul Trump campaigned as a populist, a man of the people. But his presidency reminds me of a popular motto among Washingtonians I know: Never fall in love with politicians; they'll only break your heart.

======== (E-mail Clarence Page at cpage@chicagotribune.com.)


(c) 2018 CLARENCE PAGE DISTRIBUTED BY TRIBUNE MEDIA SERVICES, INC.

 

 

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