Payday lenders don’t get much traction on Wall Street.
Curo Financial, which operates controversial loan companies like Speedy Cash, which typically target low-income borrowers, got off to a poor start to its IPO on Thursday, as unresolved regulatory issues still loom in Washington.
The stock was priced at the low end of a $ 14- $ 16 range Wednesday night, raising $ 93 million. Recently, shares were at $ 14.20 in Thursday afternoon trades.
The Wichita, Kansas-based lender charges up to 1% per day for some of its loans, which are banned in 15 states and Washington DC.
The lukewarm response from investors comes as the leadership of the Consumer Financial Protection Bureau, which regulates payday lenders, remains unresolved after an argument between a former bureaucrat and the Trump administration.
Leandra English, the deputy director, claims she has the right to run the agency until Congress approves her successor, and has sued to keep Mick Mulvaney, who also heads the Office of Management and of the budget, at the head of the regulator.
English, who is still employed at the agency, filed a lawsuit to block Mulvaney, but his offer was blocked by a federal judge appointed by Trump. The English appealed.
The CFPB issued tough rules against payday lenders that would limit their issuance of repeat loans to cash-strapped clients.
Curo, however, is betting the rules won’t hit the business too hard.
“Even though the CFPB rule has been approved as a final rule, the CFPB rule may not become effective in its current form,” the company told investors in its regulatory filing late last month.
