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the federal government has a Consumer
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Financial Protection Bureau thanks to
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Senator Elizabeth Warren who is now a
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presidential candidate back when
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Elizabeth Warren was a Harvard Law
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School professor she decided American
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consumers needed federal protection from
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the predatory practices of some of our
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major banks and financial institutions
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as well as the predatory lending
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companies who target the most
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financially vulnerable among us the
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companies that try to take advantage of
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newly enlisted members the American
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military who are looking for their very
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first car loan or companies that
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specialize in so-called payday loans
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short-term loans for a few days or a few
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weeks that charge exorbitant rates to
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people who just need some money to make
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it to their next payday
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those kinds of lenders do everything
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they can to hide the annual percentage
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rate of their loans usually referred to
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as the APR the amount of money it costs
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you per year to borrow
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that's the APR and that's what many
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lenders do not want you to know it was
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Professor Elizabeth Warren's design of
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the Consumer Financial Protection Bureau
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that was included in the 2020 2010
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package of legislation passed by
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Congress with bipartisan support and
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signed by President Obama the dodd-frank
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Wall Street Reform and Protection Act it
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was called the Trump administration
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hates consumer protection Donald Trump
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after all spent a lifetime exploiting
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consumers in various ways including
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defrauding consumers who made the
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mistake of believing Trump University
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could improve their lives 10 days after
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the 2016 presidential election Donald
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Trump was forced to pay Trump University
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students 25 million dollars after they
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sued him for fraud creators of
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fraudulent businesses hate the Consumer
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Financial Protection Bureau the Trump
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administration's director of the CFPB
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Kathleen croninger has no experience in
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consumer protection and no experience in
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oversight of the financial services
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industry and has dramatically reduced
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the
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of consumer complaints that the CFPB
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investigates director croninger ran into
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more than she could handle
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last week when it was freshman
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congresswoman Katie Porter's turn in a
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House Financial Services Committee
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hearing hello director could you please
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explain to this committee the difference
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between an interest rate and an APR so
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the APR is the is the extrapolation if
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it were a one-year term in terms of the
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loan so that's the calculation that is
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laid out in an Tila and particular if I
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take the stated interest rate and do the
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math to deal with the fact that it's
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annualized the APR I would be correct
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yes okay um mr. croninger the annual
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percentage rate and i'll be happy to
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send you a copy of the textbook that I
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wrote explains that the APR is derived
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from the finance charge the amount
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financed and the payment schedule it's a
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mathematical transformation of those
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three numbers into the cost of credit
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expressed yes at a yearly rate over
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simplification I understand that you
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know well well my concern is whether you
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know well ma'am because you are the one
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responsible for making sure that
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American consumers know well when they
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take on loans let's do an example I'm a
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single mom by the side of the road my
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car is broken down I need money right
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now I pick up my cell phone I go to
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Speedy Cash an online lender I'm in
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California I have to get to work I have
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to have the cash to fix my car to get to
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work
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I can barely read the little disclosure
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on my phone the cost of speedy cash is
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you may want to write this down ten
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dollars per $100 borrowed I need $200 to
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fix my car the origination fee is $20
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the term of the loan is two weeks
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typical for when I get paid
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what is the APR and if you'd like a
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calculator we have one for you I
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understand where you're getting at the
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end of the day the issue is certainly
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when you actually are able to repay that
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loan and whether or not you take out an
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additional loan going through this and
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your service creditor short term small
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dollars anyway time you the scooter I'm
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asking you what the APR is and Katie
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Porter had to reclaim her time
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repeatedly because she could not get an
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answer from director croninger on that
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simple question of what is the annual
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percentage rate of the predatory payday
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loan that congressman Porter just
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described and so congressman Porter
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ended that line of questioning this way
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term reclaiming my time the other issues
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that are hot claiming my time I take
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that as to a no that you cannot do the
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calculation but I'm particularly
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concerned about this given that you
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could not even correctly define the APR
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cars reporter then tweeted the answer to
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her own questions to her own question to
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students at home the answer is the $20
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origination fee is included in the
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definition of finance charge so the
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interest of $20 plus the fee of $20
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makes the $40 cost to borrow $200 for 14
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days the answer 520 percent would be the
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APR truth-in-lending law requires APR to
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include fees which CFPB director did not
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know like Elizabeth Warren before her
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Katey Porter was a law school professor
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before she became a member of Congress
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and it shows every time it's Katie
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Porter's turn in a hearing room thanks
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for checking out our YouTube channel
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