Home wireless networking Payday lenders have new hope with Trump’s CFPB

Payday lenders have new hope with Trump’s CFPB


Usurers smell of blood.

Payday lender selling loans ridiculed as ‘debt traps’ by Office of Consumer Financial Protection goes public – and he bets on the Trump administration take it slow.

Curo Group, a company that charges nearly 1% interest per day on some of its loans, seeks to raise $ 123 million in an initial public offering on the New York Stock Exchange, valuing the company to over $ 700 million.

IPO filing comes just days after Richard Cordray resigned from CFPB, an industry-hostile agency that published a rule last month to limit predatory lending.

The company, which operates as Speedy Cash and Rapid Cash in the United States, is betting the next head of the consumer watchdog won’t go so hard with it.

“Even though the CFPB rule has been approved as a final rule, the CFPB rule may not become effective in its current form,” the company wrote in its regulatory filing on Wednesday.

Payday loans, which are banned in 15 states including New York, as well as Washington DC, typically charge exorbitant rates for short-term cash advances.

Last month, the CFPB published a study that ridiculed payday loans as ‘debt traps’ this caused four in five people to borrow larger amounts just to pay off what they originally owed.

The CFPB also recommended limits on the amounts money lenders can grant to their cash-strapped borrowers.

The company, at its 215 locations in the United States and 190 in Canada, offers unsecured installment loans and charges an average of 13.2% interest per month, she said on the file.

On secured loans, the rate drops to an average of 10.6% per month.

Indefinite loans, which act like lines of credit, carry interest rates of up to 0.99% per day, he said.

A fourth type of loan, which the company calls one-time payment – usually for a small amount of money after the borrower delivers a post-dated check – carries a fee of up to 25%.

Single payment loans represented 28% of Curo Group’s business in the nine months ended September 30.

Despite the high interest rates and fees, Curo Group apparently has no trouble attracting clients: revenues increased 14.2% in the nine months ended September 30 compared to the previous year.

Net income slipped 23.4% to $ 42.7 million during the period.

Regardless of the next CFPB director, Curo believes his prospects are good under the current Congress.

The “CFPB rule remains subject to being overturned by disapproval under the Congressional Review Act,” the company said, noting that Congress had rejected an arbitration rule proposed by the CFPB.

“In addition, the current CFPB director has announced his resignation, effective from November 24, 2017. His successor could suspend, delay, modify or withdraw the CFPB rule.”

Source link


Please enter your comment!
Please enter your name here