Repealing Dodd-frank bad for vets and service members
The House of Representatives is expected to vote soon on a bill to “repeal and replace” the Doddfrank Wall Street Reform and Consumer Protection Act of 2010, the financial reform law enacted in the wake of the financial crisis. This repeal bill, officially designated as H.R. 10 and named the Financial CHOICE Act, is better described as the “Wrong Choice Act” because it puts financial predators back in charge of our economy.
While H.R. 10 deregulates Wall Street trading, in some cases removing rules enacted after the stock market crash of 1929, my focus here is on how the Wrong Choice Act would hurt the average consumer by gutting the Consumer Financial Protection Bureau (CFPB). The Doddfrank law created the CFPB because the financial crisis showed that there was a need for a government agency whose sole focus was to make sure consumer protection laws were enforced and consumers were protected across all areas in the financial marketplace.
Since its creation, the CFPB has returned approximately $12 billion to 29 million consumers who had been defrauded and taken advantage of by financial companies. This includes relief for consumers who were victims of Wells Fargo’s unauthorized accounts scheme, credit card holders tricked into buying fraudulent add-on products, homeowners who were illegally foreclosed on, students charged more than they owed by student loan servicers, and African-, Hispanic-, and Asian-american borrowers who experienced discriminatory interest rate markups by automobile lenders.
The Wrong Choice Act would essentially eliminate the CFPB’S authority to take these types of enforcement actions, supervise financial institutions, and issue rules that protect consumers. It would also make the CFPB director fire-able at will by a president who has had to settle multiple personal lawsuits for breaking consumer protection laws.
The bill would gravely weaken a range of borrower protections in the housing market, including the CFPB’S rule requiring lenders to verify that borrowers can afford their mortgage. Have the bill authors forgotten the housing crisis?
The Wrong Choice Act would prevent the CFPB from issuing any consumer protection regulation for debt collection, binding arbitration clauses, or payday, car-title, or similar small dollar loans. It would also permit lenders to circumvent state laws governing consumer loans. Unscrupulous lenders — aka loan sharks — target low-income Americans with products designed to entrap them in a never-ending cycle of debt. This bill would make a bad situation even worse.
Another group targeted by loan sharks are our military service members. As a veteran who served in the Air Force for 25 years, I know the unique financial challenges our service members face. The Department of Defense has found that “predatory lending undermines military readiness, harms the morale of troops and their families, and adds to the cost of fielding an all volunteer fighting force.” The CFPB’S enforcement actions have secured $130 million in relief owed to service members, veterans and their families. For example, the agency took action against Cash America for violating the Military Lending Act by overcharging our troops and against USA Discounters for charging service members fees for services they never received. The CFPB has fielded more than 74,000 complaints from service members and their families, its Office of Servicemember Affairs has visited more than 148 military installations, and its work has been praised by senior military leaders and organizations supporting service members and veterans.
The CFPB contributes immensely to the quality of life of all Americans, but it is under threat from the Wrong Choice Act. Colorado’s delegation in the House — especially Republican Congressman Mike Coffman, a fellow veteran who has shown some independence from his party — should all oppose this dangerous piece of legislation.
T. A. Taylor-hunt is state chair for the National Association of Consumer Advocates and is a retired U.S. Air Force major.