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8 Stocks To Play The Mulvaney Era At The CFPB

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8 Stocks To Play The Mulvaney Era At The CFPB

One of President Donald Trump's top campaign promises was to eliminate regulations and free up U.S. corporations to operate will fewer restrictions. One of Trump’s first targets after taking office was the Consumer Financial Protection Bureau, which was created in the wake of the mortgage crisis to protect American consumers from predatory activities by banks and other financial institutions.

According to Height Securities analyst Edwin Groshans, Trump-appointed CFPB director Mick Mulvaney, who has a history of criticizing CFBP oversight, will loosen the reins on the financial industry, creating a number of potential investment opportunities.

“The change in the Consumer Financial Protection Bureau's leadership is positive for payday and auto title lenders, indirect auto finance companies, debt collectors, and, to a lesser degree, prepaid card issuers and mortgage lenders,” Groshans wrote earlier this week.

Groshans said regardless of whether or not Mulvaney’s official appointment is blocked in court, the Trump-era CFPB will be relatively impotent no matter who ends up in charge.

“We expect a significant reduction in enforcement actions as a result of the change in leadership,” Groshans said.

In his report, Groshans listed eight stocks that could be the biggest winners from the downfall of the CFPB:

  • Enova International Inc (NYSE: ENVA)
  • World Acceptance Corp. (NASDAQ: WRLD)
  • Credit Acceptance Corp. (NASDAQ: CACC)
  • Ally Financial Inc (NYSE: ALLY)
  • Green Dot Corporation (NYSE: GDOT)
  • Total System Services, Inc. (NYSE: TSS)
  • Encore Capital Group, Inc. (NASDAQ: ECPG)
  • Pra Group Inc (NASDAQ: PRAA)

The CFPB has already announced it intends to change or eliminate rules related to oversight of prepaid cards and payday lending, and it also intends to modify the Home Mortgage Disclosure Act rules as well.

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Image credit: Gage Skidmore [CC BY-SA 3.0], via Wikimedia Commons

Latest Ratings for ALLY

DateFirmActionFromTo
Oct 2020Credit SuisseMaintainsOutperform
Oct 2020Morgan StanleyMaintainsOverweight
Oct 2020Piper SandlerMaintainsOverweight

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