PAY LATER

The gutting of the Consumer Financial Protection Bureau.

- BY E. TAMMY KIM

The C.F.P.B. is meant to protect working people. Why does Trump want it gone?

In the fall of 2019, Kashaye Traylor decided to buy a car. She was thirty years old, living in Rochester, New York, and raising a young son on her own. She worked full time at a nursing home and went to school in her off-hours, studying to earn a practical-nursing license. Her schedule was hectic, and often required her to cross town by bus, a time-sucking endeavor. “It’s hard to get around if you don’t have a vehicle,” she told me. She saved up her hourly pay and eventually went to a Kia dealership, where she picked out a black 2013 Optima. The cash price was about eleven thousand dollars; the price Traylor was quoted, after factoring in a loan and finance charges—at an annual percentage rate, or A.P.R., of 22.99 per cent—was twenty-four thousand. “I didn’t even know what an A.P.R. was,” she told me. She put down sixteen hundred and agreed to pay three hundred and forty-three dollars per month for the next five and a half years.

Traylor signed a five-page contract created not by the dealership but by Credit Acceptance Corporation, a subprime auto lender, based in Southfield, Michigan, that partners with thousands of car lots across the country. On page 4, the dealership signed over its own interest in the car. “The Seller has assigned this Contract to Credit Acceptance Corporation,” it stated. “This assignment is without recourse.” Traylor didn’t know it, but it was Credit Acceptance that had set the terms of the deal, using a proprietary algorithm. The algorithm didn’t assess her particular financial situation; rather, it calculated how much the company would be able to recover if she didn’t follow through with her payments. The lower the predicted recovery amount, the higher the price.