by Blair Bess
As Congress struggles to enact legislation that will bring tax relief to the rich and obliterate healthcare for the not-so-rich, another battle is brewing beneath the “Swamp”: the never-ending struggle to decimate the lusterless policies that affect the lives of ordinary Americans. These are the policies put in place to protect us no matter what our political persuasion may be.
Wresting control of the Consumer Financial Protection Bureau, or CFPB, is the latest move by the administration to gut any regulatory body designed to ensure that “the 99 percent” of us are not taken advantage of, or endangered by financial institutions.
The CFPB is part of the Dodd-Frank Wall Street Reform and Consumer Protection Act and was designed to avoid repeating the financial calamities that occurred in the wake of the stock market collapse of 2008. The same Wall Street that then-candidate Trump railed against during the 2016 presidential campaign; swamp-dwellers the president promised to rid the American public of, which he has, so far, failed to do.
The collapse that precipitated Dodd-Frank has been variously attributed to complex investment schemes by banks “too big to fail,” as well as a lack of regulatory oversight. The law was enacted to avert practices on Wall Street that nearly caused international financial markets to collapse.
Since its inception six years ago, the CFPB has safeguarded Americans from financial harm. It’s followed up on nearly 2,000,000 consumer complaints and has returned almost $12 billion in refunds and cancelled debts. It’s helped nearly 30 million Americans through its enforcement actions. Earlier this year, the agency assessed penalties totaling $100 million against Wells Fargo Bank for its toxic lending practices and fraudulent activities, which included the systemic opening of unauthorized deposit and credit card accounts.
The CFPB has put into place regulations to stop payday loan companies from trapping consumers in a web of never-ending debt and entering loans which borrowers cannot possibly pay back without loss of property or missing other financial obligations. Like paying rent. Or eating. Or medical care. Seems like a good thing.
Because Dodd-Frank was written in large part by former Rep. Barney Frank, and the CFPB essentially created by Sen. Elizabeth Warren, two avowed liberals, the agency’s mere existence has been anathema to Republican lawmakers, who believe the agency wields too much power and mires lenders in too much red tape. This opinion has some degree of credence.
Dodd-Frank has made the lending process for both consumers and businesses far more stringent; getting a loan isn’t as easy as it was in the pre-2008 days. Community banks often find themselves subject to the same standards as larger institutions; rules that often require considerable time and personnel to remain in compliance with federal guidelines. Republican lawmakers also claim there is not enough oversight of the CFPB and that its regulations are cumbersome.
The law also included a stipulation that the CFPB’s deputy director would take over, should the agency’s director leave the post, becoming acting director in the process. Which is why the CFPB is once again in the news. A battle continues to rage over who the real acting director is: former deputy director Leandra English, a career regulator, or the president’s appointee, budget director Mick Mulvaney, who famously labeled the CFPB a “sad, sick joke.”
Tuesday’s decision by Federal District Judge Timothy Kelly, a Trump appointee, sided with the administration, and allows Mulvaney to remain in control at the CFPB. For now. The case will likely end up before a federal appeals court.
We can only hope that politicization of the public good and the evisceration of an agency created with the interests of the American people in mind is not of paramount importance to Mr. Mulvaney. Though he may think of the agency he now temporarily heads as a joke, consumer protection is anything but a laughing matter. On that, most Americans would agree.