Pres­i­dent-elect Trump needs to save the CFPB

Daily Local News (West Chester, PA) - - BUSINESS - By Liz We­ston NerdWal­let Colum­nist

Ten years ago, bul­lies had taken over the play­ground. Fi­nan­cial ser­vice firms preyed on their cus­tomers with im­punity:

• Lenders made ex­pen­sive, risky mort­gages to peo­ple who couldn’t af­ford to pay the money back.

• Credit card is­suers foisted over­priced in­sur­ance and other add-on prod­ucts on mil­lions of un­sus­pect­ing cus­tomers.

• Credit bu­reaus ig­nored ev­i­dence sub­mit­ted by peo­ple dis­put­ing er­rors in their credit re­ports.

• Com­pa­nies sold delin­quent debts to col­lec­tion agen­cies that ran amok, vi­o­lat­ing fair debt col­lec­tion laws and strong-arm­ing peo­ple into re­pay­ing debts they didn’t even owe.

Peo­ple’s com­plaints fell on deaf ears, since con­sumer pro­tec­tion wasn’t a pri­or­ity at any agency. Huge swaths of the credit and debt in­dus­tries, in­clud­ing credit bu­reaus, col­lec­tion agen­cies and pay­day lenders, op­er­ated with lit­tle gov­ern­ment over­sight.

Then the Con­sumer Fi­nan­cial Pro­tec­tion Bureau pushed back.

Cre­ated by the Dod­dFrank Wall Street Re­form and Con­sumer Pro­tec­tion Act that Pres­i­den­t­elect Don­ald Trump has vowed to re­peal, the CFPB launched five years ago to de­fend the lit­tle guy. Now the agency it­self needs a strong de­fender, one who un­der­stands that a truly healthy, com­pet­i­tive fi­nan­cial mar­ket­place can’t ex­ist with­out sen­si­ble regulation and en­force­ment. It’s un­likely to find that de­fender in Trump. abil­ity to make the risky loans, such as in­tere­stonly or nega­tive amor­ti­za­tion loans, that set off the fi­nan­cial cri­sis.

• Or­dered lenders that were il­le­gally over­charg­ing ser­vice mem­bers to re­fund mil­lions of dol­lars to their mil­i­tary bor­row­ers.

• Forced mul­ti­ple credit card is­suers — in­clud­ing Amer­i­can Ex­press , Bank of Amer­ica , Chase and Citibank — to pay hun­dreds of mil­lions of dol­lars in com­pen­sa­tion to con­sumers over il­le­gal prac­tices, in­clud­ing un­fair billing and de­cep­tive mar­ket­ing.

• Got the three main credit bu­reaus to fi­nally up­date their dis­pute-pro­cess­ing soft­ware so that doc­u­ments sub­mit­ted by con­sumers, such as ac­count state­ments or re­ceipts, could be for­warded to com­pa­nies re­port­ing in­cor­rect in­for­ma­tion.

• Took steps to rein in the debt col­lec­tion in­dus­try, in­clud­ing fin­ing Chase $136 mil­lion for sell­ing “zom­bie debts” to debt buy­ers that in­cluded ac­counts that were al­ready set­tled, dis­charged in bank­ruptcy or sim­ply not owed. in­crease rev­enue. They lied to cus­tomers about what prod­ucts re­ally cost and signed peo­ple up for ser­vices they didn’t want. They of­fered in­cen­tives for mort­gage lenders and bro­kers to steer un­wit­ting cus­tomers into high-cost loans when the bor­row­ers qual­i­fied for safer, low­cost loans.

Just af­ter the CFPB opened its doors, Bank of Amer­ica CEO Brian Moyni­han be­came the poster child for fi­nan­cial sec­tor ar­ro­gance. Asked to de­fend a new $5 monthly fee the bank an­nounced it would charge for us­ing a debit card, Moyni­han in­sisted “we have a right to make a profit.” No, ac­tu­ally. Un­der our sys­tem, com­pa­nies have the right to TRY TO make a profit. That’s a huge dif­fer­ence, since no one has a right to prof­its that aren’t earned hon­estly.

And that’s why the CFPB ex­ists: be­cause many fi­nan­cial ser­vice com­pa­nies don’t un­der­stand that dis­tinc­tion, and will go to any lengths to make a buck. With­out an en­forcer to make sure they ad­here to the rules that make mar­ket­places trans­par­ent and fair, these com­pa­nies will run roughshod over con­sumers.

The CFPB’s sole pri­or­ity is to make sure the av­er­age per­son gets a fair deal. Pres­i­den­t­elect Trump, you were elected by those peo­ple — peo­ple who’ve been by­passed by the eco­nomic re­cov­ery and run over by Wall Street. If you re­ally had their in­ter­ests at heart, de­fend­ing and even strength­en­ing the CFPB would be among your high­est pri­or­i­ties.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.