In another indication that the Trump Administration is taking a vastly different approach at the CFPB, the agency has dropped an investigation of World Acceptance Corp., one of the largest small-dollar loan companies.
The company, which has 1,331 offices in 15 states and Mexico and specializes in instalment loans, said the agency has notified the company that the probe has been completed and no action will be taken against the company.
World Acceptance had indicated in March 2014 that it was the target of a CFPB probe into how it markets and provides loans. And then, in August 2015, the company said that the CFPB staff was considering recommending that the agency take legal action against the company. That notice was intended to allow the company to present its side before the CFPB made a final decision.
In a 2013 hearing, Sen. Ron Wyden (D-Ore.) pressed CFPB officials about World Acceptance, saying the company set up offices near military bases, where they made loans with interest rates of more than 100%. Borrowers are then pressed to take out additional loans to pay for previous ones.
The CFPB has not issued any public statement about why it has dropped the investigation.
However, in recent weeks, Acting CFPB Director Mick Mulvaney has taken several steps to roll back the aggressive enforcement regime that was instituted under former Director Richard Cordray. He has said that the agency will be reexamining its basic functions and he has said that the agency will be revising its payday lending rule.
Consumer advocates have said they are alarmed by those steps and they condemned the decision to drop the probe of World Acceptance.
"The Consumer Financial Protection Bureau was established to protect consumers from predatory lenders like World Acceptance Corporation, but under Mick Mulvaney's control the Bureau is undermining that important mission," said Karl Frisch, executive director of Allied Progress, one of those groups.
Meanwhile two court cases challenging whether President Trump has the power to appoint Mulvaney are pending in federal court. In one of those cases, Deputy Director Leandra English has alleged that she, and not Mulvaney, should be running the bureau, citing sections of Dodd-Frank.
In the latest move, the U.S. Circuit Court of Appeals for the District of Columbia has agreed to move the case on an expedited schedule, with all briefs due by March 6.
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