WASHINGTON (Reuters) - Mick Mulvaney, head of the U.S. Consumer Financial Protection Bureau, cut in half a fine that his Obama-era predecessor sought against a payday lender and dropped some of the agency’s earlier claims in the case, three people familiar the matter told Reuters.
Mulvaney, appointed by President Donald Trump, has vowed to dial back what he says is overreach by the independent agency, which was created following the 2007-2009 financial crisis to stamp out predatory lending.
The CFPB fined South Carolina-based lender Security Finance $5 million on June 13 for harassing borrowers when collecting debt and mishandling credit report data.
Richard Cordray, Mulvaney’s predecessor, had wanted to seek additional charges against the company for pushing borrowers to buy personal insurance that was bundled into loans.
Cordray wanted Security Finance to pay $11 million, with $3 million as a penalty for the debt collection and credit reporting abuses and at least $8 million to compensate consumers who felt pushed into insurance, the sources said.
Mulvaney dropped the insurance claims, meaning the settlement with Security Finance leaves no money for customers Cordray wanted to remediate. Reuters reported in March that Mulvaney was reviewing the case.
“We are agreeing to this settlement to close the matter and move forward in serving our customers,” said Security Finance chief Susan Bridges in a statement. The company declined to comment on its insurance business.
John Czwartacki, spokesman for the CFPB, said the agency’s claims in the consent order were based on what was supported by evidence.
“The enforcement arms of government
