June 28, 2018
Mulvaney Reportedly Cut $11 Million Fine in Half for Campaign Donor, Despite Hundreds of Consumer Complaints
Agency Found That South Carolina Lender Preyed on Low-Income Borrowers
WASHINGTON, D.C. – In another example of the influence corporations have over the Trump administration, the acting director of the U.S. Consumer Financial Protection Bureau (CFPB) reportedly has cut in half a penalty against a lender that donated to his 2016 campaign.
According to Reuters, acting bureau director Mick Mulvaney significantly reduced the CFPB’s penalty against Security Finance, an installment lender that the CFPB found uses improper, aggressive collections practices – including physically preventing consumers from leaving their homes. According to Reuters, Richard Cordray, Mulvaney’s predecessor, planned to impose an $11 million penalty against the company. Mulvaney reduced it to $5 million.
Mulvaney in April described how he, as a South Carolina congressman, had a “hierarchy” in his office: “If you’re a lobbyist who never gave us money, I didn’t talk to you. If you’re a lobbyist who gave us money, I might talk to you.”
Security Finance, a South Carolina company, gave $2,000 to Mulvaney’s 2016 campaign, records show.
According to the CFPB’s complaints database, hundreds of consumers have complained about Security Finance’s predatory practices. One consumer, upset about a barrage of debt collection calls, wrote that the company was “calling family, and friends with personal information leaving information on others voicemails. They continue to harass, attempt to embarrass, and call after their open hours (leaving messages not addressing who or why their [sic] calling) despite speaking with me about my situation.”
“What a great investment. For $2,000, Security Finance got its fine reduced by $6 million,” said Bart Naylor, financial policy advocate for Public Citizen’s Congress Watch division. “Another day, another retreat from protecting American consumers from financial abuse.”
U.S. Sen. Elizabeth Warren (D-Mass.) has requested that the inspector general for the Federal Reserve, which funds the CFPB, scrutinize the agency’s retreat on enforcement activity and rulemaking for the high-rate lending industry.