The benefit of the doubt for new CFPB Director Kathy Kraninger by some consumer groups received a death knell this week when she proposed stripping the ability to pau from payday loan underwriting standards AP Photo Carolyn Kaster The benefit of the doubt new Consumer Financial Protection Bureau Director Kathy Kraninger received from some consumer advocates evaporated this week when she indicated she would ax payday lending standards developed under Obama CFPB Chief Richard Cordray On the day last December Kraninger was confirmed by the Senate Cordray appeared to ask his followers not to oppose her from the get-go with a tweet Like me she had not run an agency before Two weeks later came a tweet pat on the back A very reasonable and practical decision by the new CFPB director to scrap most aspects of the costly agency name change Then on February 2 Cordray lauded Kraninger in a twitter post for a good enforcement action to bar a group of international payday lenders from ever advertising making or collecting on consumer loans in the US The honeymoon ended four days later CFPB is proposing to unwind the core part of its payday loan rule - that the lender must reasonably assess a borrowers ability to repay before making a loan Its a bad move that will hurt the hardest-hit consumers It should be and will be subject to a stiff legal challenge Cordray warned Center for Responsible Lending Deputy Communications Director Charlene Crowell wrote January 17 some consumer groups like Cordray had given Kraninger the benefit of the doubt But like Cordray as well their tone changed when the CFPB head announced she wanted payday lenders to make loans to consumers even if they didnt show they had the wherewithal to pay them back Claiming payday debt is debilitating as iron shackles were during slavery Crowell wrote for an African-American newspaper in Washington DC It is indeed troubling that in 2019 that under the Trump Administration the federal agency with a designated mission to provide consumer financial protection took an about-face to protect predatory lenders instead of consumers In a phone conversation the Center for Responsible Lending spokesperson said the rollback of the payday loan rule will clearly hurt consumers She said eliminating the requirement payday lenders establish an ability to pay is a departure from mortgage and credit card lenders who are mandated to prove consumers have a reasonable chance of paying back those loans Crowells concern was buttressed by US PIRG Federal Program Director Ed Mierzwinski Kathy Kraninger dug herself a deep hole when she reopened the payday rule She needs to spend more time with consumer advocates and CFPB expert staff and less time with industry groups and the Mulvaney Hensarling political staff Shes not getting the right information to do her job Kraningers move to gut the payday loan rule drew a stinging rebuke mother of the CFPB Massachusetts Senator and Democratic presidential hopeful Elizabeth Warren who vigorously opposed her in her Senate Banking Committee confirmation hearing This new rule eliminates crucial protections for borrowers and makes it clear that the CFPB is not doing its job to protect consumers Senator Warren charged Kraninger was a protégé of Office of Management and Budget Chief who she served under as an associate director Mulvaney who also was Acting CFPB director under Trump worked to weaken the agency during his tenure and made no secret about his desire to abolish it While a Republican Congressman Mulvaney voted for Republican budgets in 2012 2013 2014 and 2015 that would have killed the CFPB He received 62 950 from payday lenders for his election and re-election campaigns according to the Center for Responsive Politics Though some consumer groups gave Kraninger the benefit of the doubt when she started as CFPB chief the Consumer Federation of America wasnt one of them We were extraordinarily skeptical of anyone Trump would put in that position The rollback of the payday rule is evidence our skepticism was well founded said CFA Executive Director Jack Gillis said