Payday lenders have new hope with Trump’s CFPB

The loan sharks smell blood.

A payday lender selling loans derided as “debt traps” by the Consumer Financial Protection Bureau is going public — and it’s banking on the Trump administration going easy on it.

Curo Group, a company that charges nearly 1 percent interest a day for some of its loans, is looking to raise $123 million in an initial public offering on the New York Stock Exchange — valuing the company at more than $700 million.

The IPO filing comes just days after Richard Cordray resigned from the CFPB, an agency that was hostile to the industry and just last month issued a rule to curb abusive loans.

The company, which does business under the Speedy Cash and Rapid Cash nameplates in the US, is betting that the next head of the consumer watchdog won’t go so hard on it.

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

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

Last month, the CFPB issued a study that derided payday loans as “debt traps” that caused four out of five people to borrow higher amounts just to pay back what they originally owed.

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

The company, in its 215 US and 190 Canadian locations, offers unsecured installment loans and charges an average of 13.2 percent interest per month, it said in the filing.

On secured loans, the rate drops to an average of 10.6 percent a month.

Open-end loans, which act like lines of credit, carry interest rates of up to 0.99 percent per day, it said.

A fourth type of loan, which the company calls single-pay — usually for a small amount of cash after the borrower hands over a post-dated check — carries fees of up to 25 percent.

Single-pay loans made up 28 percent of Curo Group’s business in the nine months that ended on Sept. 30.

Despite the high interest rates and fees, Curo Group apparently has no trouble attracting business: Revenues increased 14.2 percent in the nine months ended Sept. 30 compared with the previous year.

Net income slipped 23.4 percent, to $42.7 million, in the period.

Whoever the next CFPB director is, Curo believes that its prospects are good under the current Congress.

The “CFPB Rule remains subject to potential override by disapproval under the Congressional Review Act,” the company said, noting that Congress had voted down an arbitration rule that was put forth by the CFPB.

“Moreover, the current CFPB Director announced his resignation, effective as of Nov. 24, 2017. His successor could suspend, delay, modify or withdraw the CFPB Rule.”