- The Washington Times - Thursday, January 18, 2018

A free-market group is urging the White House to rescind an Obama-era payday lending rule that is currently under review, saying the regulation would cause “paperwork proliferation on a massive scale” for lenders.

The Competitive Enterprise Institute asked the White House Office of Information and Regulatory Affairs to reject the rule because it violates the law.

The Consumer Financial Protection Bureau’s rule “violates the Paperwork Reduction Act, a longstanding law aimed at controlling regulatory burdens,” said CEI General Counsel Sam Kazman.

The consumer bureau’s new director, White House budget chief Mick Mulvaney, announced this week that the agency will “reconsider” the regulation issued in October, which would have required payday lenders to evaluate whether borrowers can pay back their loans.

Mr. Mulvaney, who was picked by President Trump late last year to take the CFPB in a new direction after the resignation of Democrat Richard Cordray, said Wednesday that more changes are coming.

“In this new year, and under new leadership, it is natural for the bureau to critically examine its policies and practices to ensure they align with the bureau’s statutory mandate,” Mr. Mulvaney said. “Much can be done to facilitate greater consumer choice and efficient markets, while vigorously enforcing consumer financial law in a way that guarantees due process. I look forward to receiving public comments in response to this call for evidence and encourage all interested parties to participate.”

Sen. Elizabeth Warren, Massachusetts Democrat who advocated for the creation of the CFPB in 2010, blasted the move to review the payday lending rule.

“Payday lenders spent $63,000 helping Mick Mulvaney get elected to Congress and now their investment is paying off many times over,” she said. “By scrapping this rule, Mulvaney will allow his campaign donors to continue to generate massive fees peddling some of the most abusive financial products in existence.”

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