USA TODAY International Edition
Banks cheer, consumers jeer plan to deregulate Wall St.
Trump administration proposal to weaken safeguards draws fire
After Myra Brewer’s daughter died in early 2012, she received a collection agency notice that said the younger woman owed approximately $ 3,000 in a credit card debt and demanded repayment from the grieving mother.
The now 71- year- old Arkansas resident disputed the charge. Nonetheless, Brewer says she endured weeks of constant phone calls and letters about the issue before seeking help from a federal consumer organization created in the aftermath of the 2008 national financial crisis. “That got action,” Brewer said.
Now, new Trump administration plans to weaken that agency and change or eliminate many other financial- industry regulations and safeguards enacted after the financial crisis represent the opening shot in what consumer groups predict will be a long Washington siege.
Tuesday, the day after the Department of the Treasury issued the most detailed blueprint yet of proposed changes to the Dodd- Frank Wall Street Reform and Consumer Protection Act, banking and other financial groups celebrated Trump’s backing of changes they’ve sought for years. The list ranged from restructuring and weakening the Consumer Financial Protection Bureau, the agency that aided Brewer, to re- examining Wall Street trading and mortgage rules.
“The Treasury Department’s report is an important first step in recognizing how a duplicative and onerous regulatory environment harms banks, the economy, and, more importantly, consumers,” said Richard Hunt, CEO of the Consumer Bankers Association, a trade association for retail banks.
Consumer advocates argue the proposals represent an unwarranted weakening of rules that have helped many Americans complaining of financial mistreatment and reined in banks and Wall Street after their excesses contributed to the nation’s worst economic crisis in generations. But major changes won’t come soon, if at all, because eliminating federal laws or Washington agency rules can take years, the advocates say.
“Enacting the administration’s regulatory agenda can be as difficult as enacting its legislative agenda if there is effective opposition,” said Dennis Kelleher, president and CEO of Better Markets, a Washington, D. C.based non- profit group that promotes the U. S. public’s interests in financial markets.
Nowhere are the disagreements hotter than over the fate of the Consumer Financial Protection Bureau. Echoing complaints from Congressional Republicans, the Treasury report said the bureau’s leadership — a lone director only loosely accountable to the president and wielding authority to enforce 18 federal financial laws — has made the agency “unaccountable to the American people.”
The bureau maintained an official silence on the Treasury Department proposals. Instead, the regulator announced its director, Richard Cordray, would hold a public event Thursday in Raleigh, N. C., to discuss student loan servicing issues, an area of continuing concern.
Alys Cohen, a staff attorney for the National Consumer Law Center, said the proposals would “kick the legs out from under the CFPB,” which reported it had provided nearly $ 12 billion in relief and assistance to more than 29 million consumers from 2011 through the end of February 2017.