Business
Column: Federal regulators step up their campaign against predatory payday lenders and their rip-offs
In 2017, the federal government was poised to give low-income consumers a respite from the myriad abuses and rip-offs visited on them by the payday lending industry.
The Consumer Financial Protection Bureau, created in 2010 as part of the banking reforms enacted after the 2008 financial meltdown, had completed a five-year project to finalize a rule that would prevent payday and installment lenders from predatory practices such as enticing borrowers into loans they couldn’t afford while extracting a vigorish that would make a Mafia loan shark blush.
Then Donald Trump happened. As president, he installed Mick Mulvaney, his budget director and a former Republican congressman from North Carolina, as the bureau’s acting director. Mulvaney effectively canceled the new rule on Jan. 16, 2018, the day it was to go into effect.
A payday advance that is repaid on payday is a payday loan, and fintech cash advance apps that call themselves ‘earned wage access’ are just high-cost lending in disguise.
— Lauren Saunders, National Consumer Law Center
Two days later, Mulvaney withdrew a lawsuit in Kansas state court that had charged four lenders with saddling borrowers with annual interest rates as high as 950%. And he closed an investigation into a lender that had contributed to his political campaign.
In the words of Sen. Elizabeth Warren (D-Mass.) — who had pushed for the creation of the CFPB — these actions “unwound years of careful CFPB work — all to benefit an industry that has close ties to Mr. Mulvaney and that has contributed more than $60,000 to his political campaigns.”
Mulvaney, absurdly, redirected the agency away from its purpose of consumer protection: “We work for the people,” he told its employees. “And that means everyone: those who use credit cards, and those who provide those cards; those who take loans, and those who make them; those who buy cars, and those who sell them.”
In other words, the CFPB would be protecting not only consumers but those who take advantage of consumers.
It now looks as if the cop is back on the beat. On July 18, the bureau proposed a new rule making clear that payday advances are loans within the definition of the federal Truth in Lending Act, meaning that companies have to fully disclose all the costs and fees to borrowers — before the borrowers sign any loan documents.
“When interest rates and fees on these loans are high, this can lead to a treadmill of debt that keeps getting faster and faster,” CFPB Director Rohit Chopra said in announcing the new rule.
The bureau also has returned to court. On May 17, it sued L.A.-based lending marketplace SoLo Funds in federal court in Los Angeles, asserting that the firm’s “advertising and disclosures … falsely tout no-interest loans when, in fact, consumers are routinely subject to fees that result in an exorbitant total cost of credit.” When the fees are toted up, the agency says, the true annualized interest rate on the loans can be more than 300%.
SoLo hasn’t yet responded to the allegations in court and didn’t reply to my emailed request for comment.
The bureau has been energized in part by a Supreme Court decision that lifted a shadow over its future. This was a lawsuit brought by some of the targeted lenders contending that the bureau was unconstitutional because it was funded by the Federal Reserve System rather than through congressional appropriations.
Several pending CFPB cases had been placed on hold while the Supreme Court pondered the appropriations issue. But the court ruled in the CFPB’s favor on May 16 in a 7-2 decision written by Justice Clarence Thomas.
Among those cases was a federal lawsuit the bureau filed in July 2022 against Texas-based ACE Cash Express, which then operated out of nearly 1,000 storefronts in 22 states, including California. The CFPB charged that when ACE borrowers said they were unable to pay back their existing loans, ACE offered them repayment plans bearing new fees but sometimes didn’t tell them a no-fee option was available in some states.
ACE already was subject to a 2014 consent order in which it agreed to pay a $5-million penalty and $5 million in customer restitution, and pledged to offer customers a refinancing of their loans as well as the free option. “ACE has not done as it pledged,” the CFPB charged in its lawsuit.
ACE responded to the lawsuit by citing the case then headed to the Supreme Court. “The days of the Bureau’s unchecked administrative agency power … are, hopefully, over,” its lawyers wrote. “Because the CFPB itself is unconstitutional,” the case should be dismissed, they argued. The trial court put the case on hold, but with the Supreme Court ruling, the case is back on the docket, with briefs due at the trial court over the next two months.
The Supreme Court ruling was long overdue. In the years since Mulvaney tore up the CFPB’s project against payday and installment lenders, that industry underwent a troubling transformation.
Once operating out of storefronts where customers could cash their paychecks for a fee, it had grown more sophisticated. Customers could now take loans as advances on their paychecks but typically had to provide the lenders with links to their bank accounts so that repayments could be drawn directly from those accounts.
The industry now styled its products as “earned wage access” providers. The firms today have innocuous, homely names such as Dave.com and Brigit; their websites are adorned with stock photos of young people and families evidently basking in the relief of a short-term financial crisis averted. Some claim to charge zero interest on their short-term loans, but that’s misleading.
One should respect the financial tightrope walked by many low-wage households living paycheck to paycheck. The CFPB knows this market; its proposed rule acknowledges that “a significant driver of demand for consumer credit … derives from the mismatch between when a family receives income and when a family must make payments for expenses.” Meanwhile, “employers have a strong incentive to delay the payment of compensation to workers, which drives demand for short-term credit.”
When the true cost of that credit is hidden from the borrowers or they’re forced to refinance, incurring multiple fees, that’s a problem the CFPB was born to address.
“A payday advance that is repaid on payday is a payday loan, and fintech cash advance apps that call themselves ‘earned wage access’ are just high-cost lending in disguise,” Lauren Saunders, associate director of the National Consumer Law Center, says on the center’s website. “The CFPB has seen through fintech payday lenders’ new clothes.”
Some firms have made deals with employers such as Walmart, Amazon, Uber, Lyft and Kroger to provide advances to workers to be repaid from their next paycheck. In 2022, the CFPB says, more than 7 million workers accessed about $22 billion via these employer-lender partnerships. According to a survey cited by the bureau, most users of paycheck advance services fall below the federal poverty line and more than 80% are hourly or gig workers.
The chief constant tying the new system to the old is fees. About 90% of workers paid a fee for the advances in 2022, averaging about $3.18 per transaction. Since most took out repeated advances, the average annual cost was almost $69.
The CFPB found that among the fees most prevalent in the wage-advance sector are those charged for “expedited” access to cash — which after all is the goal of resorting to paycheck advances in the first place.
But new kinds of fees have appeared. One is often described by the finance firms as “tips” — solicited from borrowers in acknowledgment of the service they’re being provided or to defray the cost the firms ostensibly incur by lending out at 0%.
Those are among the issues in the CFPB’s lawsuit against SoLo. The firm functions as a sort of loan broker — needy customers apply for loans, and other customers provide the loans after judging an applicant’s creditworthiness. (“Earn money with your money,” SoLo tells these small-money lenders on its website. “You lend money to other members to help them replace a tire, cover a bill or for any other reason. They pay you back and add a voluntary tip as a sign of appreciation.”)
The maximum loan is $575. Borrowers can set a repayment date that is less than a month away; if repayment isn’t made after 35 days, the bureau says, SoLo charges a late fee.
The CFPB says the tips aren’t really “voluntary” at all; lenders tend to judge loan applications based on the size of the “tip” being offered, as SoLo suggests. SoLo also prompts applicants to select among three default “donation” fees that go directly to the firm.
None of the defaults is for $0, and borrowers can’t click to the next page without making a choice. Customers can opt for a $0 donation, but only by finding the option in another part of SoLo’s mobile app as though by accident.
“Virtually all consumers who receive loans incur a Lender tip fee, a Solo donation fee, or both,” the CFPB alleges.
It’s proper to note that this isn’t SoLo’s first rodeo. Last year, the California Department of Financial Protection and Innovation reached a consent agreement with the firm over some of the same practices targeted by the CFPB; SoLo paid a penalty of $50,000 and committed to reimbursing its California customers for their “donations.”
Also last year the District of Columbia settled its own case against SoLo, in which it alleged that despite advertising no-interest, no-fee loans, the firm compelled “nearly all borrowers to provide monetary ‘tips’ and ‘donations’” that effectively drove up the annualized interest rates to more than 500%, well beyond the district’s 24% usury limit. SoLo paid a $30,000 penalty and pledged that lenders would no longer be able to know that a borrower had offered a tip or how much it would be.
And in 2022, Connecticut authorities imposed a $100,000 penalty on SoLo and required it to reimburse Connecticut customers for all “tips,” “donations,” late fees and other charges. SoLo was barred from the lending business in that state without obtaining any required license.
The battle against predatory lending to small borrowers isn’t over. Project 2025, the right-wing document designed as a manifesto of the Trump presidential campaign, has targeted the CFPB for extermination, calling it “a highly politicized, damaging, and utterly unaccountable federal agency.” The manifesto says “the next conservative President should order the immediate dissolution of the agency.”
(The document was written before the Supreme Court ruled in the CFPB’s favor, so it takes the agency’s unconstitutionality as gospel.)
The specter of rampant Mulvaneyism still lurks on the horizon in a Republican administration: taking government off the backs of the people, so predatory businesses can again saddle up.
Business
In a first for the country, voters in Monterey Park ban data centers
Residents of Monterey Park voted overwhelmingly to ban data centers on election day, making the San Gabriel Valley city the first in the nation to do so by public vote.
As of Wednesday, 86% of votes were in favor of Measure NDC, the city ban, according to the Los Angeles County registrar-recorder/county clerk.
Other cities and towns have passed moratoriums on data centers, as a wave of opposition sweeps the country. But the Monterey Park vote can only be overturned by another ballot measure, making it the most permanent data center ban in a jurisdiction.
Monterey Park’s City Council had already banned data centers by ordinance, after a proposed 247,000-square-foot data center met an outpouring of public anger and concern. The developer withdrew that plan.
That facility would have been less than 500 feet away from the nearest home, and would have used three times the electricity of the entire 60,000-person city. Residents said it would have caused noise and air pollution and driven up electricity rates.
“This ensures long-lasting protections for current and future generations,” Amy Wong, co-founder of the group San Gabriel Valley Progressive Action, said of the vote. “It means that future city councils cannot overturn a data center ban, even if data center developers wanted to spend money to fund pro-data center candidates.”
The measure had no formal opposition. The developer of the proposed facility, investment firm HMC StratCap, said it wouldn’t engage in the ballot fight when it withdrew in March.
The Data Center Coalition, an industry trade group, expressed disappointment in the vote.
“It sends a signal that the area is closed for business, both for data centers and for other significant economic development projects,” state policy director Khara Boender said.
“It deprives local residents of the opportunity to compete for jobs and investment, while also causing the area to relinquish substantial long-term economic investment, high-wage jobs, and critical tax revenue to neighboring areas or other states.”
SGV Progressive Action worked with hyperlocal groups including No Data Center Monterey Park to rally support for the measure.
The group is now focused on stopping data center proposals in the City of Industry and fighting a move by City of Industry, Santa Fe Springs, Vernon and City of Commerce to welcome data centers and other industry with fast-tracked permitting and tax incentives.
City of Industry, in the San Gabriel Valley, and Vernon, south of downtown L.A., are primarily industrial areas, each with around 300 permanent residents. They are employment centers, and tens of thousands of workers commute in daily.
There has been little vocal opposition to data centers among the few residents of these cities. Wong said the protest is primarily coming from the surrounding neighborhoods.
“If a data center gets built in City of Industry, residents across the region would bear the brunt of pollution and increased utility costs,” Wong said, noting that it is surrounded by 16 other cities and unincorporated communities.
Data center proposals have been limited in California compared to Virginia, Texas, Georgia, Illinois and Arizona, which sit at the center of a recent boom in hyperscaler facilities to power artificial intelligence.
California has the third-most data centers in the country, with 300, but high electricity rates, expensive land and regulatory hurdles mean that fewer, and smaller, facilities are currently planned than in other hotspots.
That doesn’t mean opposition hasn’t been fierce. In Coachella and Imperial County, residents are showing up in droves to protest local proposals.
In the San Gabriel Valley, Montebello, El Monte and Baldwin Park have all enacted temporary moratoriums, and Alhambra recently banned data centers as part of a zoning code update.
Wong said she hoped the ballot measure vote would galvanize the opposition. “The vote is a testament to the people power of our region,” she said. “Our region is worth protecting, and we won’t let data centers determine our future.”
Business
Rent-hike ban to protect fire victims ends despite gouging concerns
A rule intended to prevent rent gouging in the wake of the Eaton and Palisades fires has lapsed in Los Angeles County, possibly exposing some renters to hikes.
The executive order that blocked rent increases was issued by Gov. Gavin Newsom amid the devastating wildfires last year. Under the order, landlords couldn’t increase rents by more than 10% above their prefire levels.
The rule, which was supposed to be temporary and was repeatedly extended, ended Friday after a vote to extend it again failed to garner enough votes. Supervisor Lindsey Horvath, whose district includes Pacific Palisades, sounded the alarm in a motion to extend price protections that failed to pass at the Board of Supervisors’ May 19 meeting.
“These price gouging protections continue to be necessary as construction and rebuilding continue, and as thousands of people remain displaced,” the motion said. “Families which signed short-term leases could face drastic price increases of 50% or more without further price gouging protection.”
Los Angeles County is home to more than 1 million rental properties, though not all of them needed protection from the new rule. There are already stricter rent increase caps for many residences, depending on the location, type and age of the building. Despite the rent control in the region, the people of Los Angeles pay among the highest rents in the country.
It is uncertain whether renters will face rapidly rising rents now that the protection has lapsed. But some real estate experts and policymakers said there was no need for the temporary rule that was part of the governor’s state of emergency.
Supervisors Kathryn Barger, Janice Hahn and Holly Mitchell abstained from voting on the motion to extend the protection, while Supervisors Hilda Solis and Horvath supported it.
“I abstained because I did not see sufficient evidence to justify extending this emergency ordinance, nor did I see evidence to eliminate it entirely,” Hahn said.
Barger’s office said she supported allowing the protections to sunset while waiting to see whether new information emerged.
“Market data already shows countywide rents are only about 2% above pre-emergency levels and rental inventory has grown,” Barger representative Helen E. Chavez Garcia said. “The Supervisor is also mindful of the burden these ongoing protections place on small property owners throughout the county.”
Mitchell did not immediately respond to a request for comment.
There haven’t been steep rent hikes in neighborhoods within three miles of the Palisades fire, according to a Times analysis of data from Zillow, the property listing company.
In ZIP Codes within three miles of the Palisades fire, rent increased 4.8% from December 2024 to April 2025. In areas around the Eaton fire, which destroyed swaths of Altadena, rent jumped 5.2% in the same period.
In L.A. County, ZIP Codes farther from the fires saw only about a 2% increase.
A landlords representative, Jesus Rojas of the Apartment Owners Assn. of Greater Los Angeles, told the supervisors during public comment at the meeting that the county’s rent-gouging rules have “long outlived the emergency they were intended to address” and are now being “wrongfully used to harm thousands of rental housing providers throughout the county.”
“There is no proof that multifamily rental housing providers are hugely increasing rents for impacted homeowners,” Rojas said.
Indeed, there are strong signs that the property market in the Los Angeles area has at last begun to cool.
L.A. metro-area rent prices recently fell to a four-year low, with the median rent slipping to $2,167 in December.
Meanwhile, condominium sales had their slowest start of the year in decades. Condo sales in Los Angeles have plummeted to a 20-year low, with fewer than 2,000 units sold in January and February — the worst start to the year since 2005.
Newsom defended the price-gouging protections shortly after they went into effect.
“In the days following the Los Angeles firestorms, we worked quickly to protect Los Angeles survivors from any form of exploitation,” he said in February 2025. “The state has the tools in place to not only block price gouging during this emergency, but also to prosecute bad actors.”
The Los Angeles County Department of Consumer and Business Affairs said it received more than 2,000 complaints after the fires, alleging that retailers and landlords were taking advantage of people put in hardship by their losses, and sent out more than 2,000 cease-and-desist letters to businesses and landlords for alleged price gouging, said Morine Merritt, who oversees department investigations into consumer and real estate fraud.
“Close to 90% of the complaints that we received involved allegations of rent increases,” Merritt said in an interview. Now that the fire-related protections have expired, existing laws and “regular market conditions determine price increases for goods and services, including rents,” she said.
Crackdowns on fire-related rent gouging have been rare, said Chelsea Kirk of the activist organization the Rent Brigade, which analyzed L.A. County’s rental market in the year after the fires. It reported 18,360 potential examples of price gouging in listings but said that few lawsuits had been filed by authorities so far.
Last week, Rent Brigade announced what it said was the first private civil lawsuit brought by a family that claimed to be rent-gouged in the aftermath of the wildfires. Plaintiffs Randall and Candy Renick, whose Altadena home was damaged, said they were charged nearly three times the maximum permitted rate for nearly 10 months. They seek restitution of $96,000 plus civil penalties and attorneys’ fees.
The rental market has probably stabilized since the fires, Kirk said, but other families may still be “locked into illegal rents” that they agreed to pay when they were in a rush to find housing after they were displaced.
Business
Read Nick Bilton’s Letter to Scott Pelley
Dear Mr. Pelley:
I meant what I said in my letter last week to the 60 Minutes team: joining 60 Minutes is the honor of my career and I am grateful to be working alongside the people who have contributed to the most important television journalism brand this country has ever produced. While I’m new to 60 Minutes, I’ve devoted my career to investigative journalism and storytelling. I started this job excited to collaborate and to benefit from the wisdom and experience of the 60 Minutes veterans, with you among them. For that reason, one of the first things I did in my new role was call you to talk and invite you to dinner. It is a profound disappointment that you rejected that overture and chose ambush instead. Yesterday, you hijacked my first meeting with staff to disparage me, my qualifications, and my intentions with remarkable incivility and contempt. I welcome a diversity of viewpoints and respectful debate among the team, but this was nothing of the sort. Yesterday’s performative display of hostility enacted in front of the staff instead of in a civil, private conversation-demonstrated that you have no interest in contributing to the future success of the show, or approaching my new tenure with a mind open to collaboration and progress. I am here to deliver first-in-class news programming, not to make headlines about newsroom drama. I am eager to work alongside those who share this goal.
Despite yesterday’s misconduct, I had hoped that in sitting down with you today we could find a path forward together. You made clear that you are not interested in such a path.
Your antipathy to the future of the show has come through loud and clear. And I have heard you. I therefore write on behalf of CBS News, Inc. (“CBS”) to inform you that your employment with CBS is terminated for cause effective immediately. Enclosed is your formal termination letter.
Sincerely,
Nick Bilton
Executive Producer, 60 Minutes
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