Consumer Protections Are Under Threat Now More Than Ever
Editor's note: As of December 6, 2018, Kathy Kraninger has been confirmed as the next director of the Consumer Financial Protection Bureau to succeed Acting Director Mick Mulvaney.
Over the past two years, Congress, the Trump Administration and various federal regulators—particularly the Consumer Financial Protection Bureau (CFPB)—have taken steps to weaken or repeal important consumer protections put in place after the 2008 financial meltdown. And they’re just getting started: more deregulatory actions are in the pipeline. But there are steps advocates can take to pushback and protect vulnerable families, highlighted in a new policy brief, Consumers Need Protections from Predatory Financial Products and Services.
Attacks on Consumer Protections
Mick Mulvaney, Interim Director of the CFPB and Director of the Office of Management and Budget (OMB), is actively working to hamstring the Bureau. Kathy Kraninger, Trump’s nominee for permanent Director of the CFPB and one of Mulvaney’s current deputies at OMB, has no consumer protections experience. If she is confirmed, she will likely continue where Mulvaney left off. The Banking Committee has already moved her confirmation along for a full vote by the Senate.
On top of this, the landmark payday lending regulation that was released by the Bureau in the fall of 2017 is going to be reconsidered, paving the way for amendments to weaken the rule or lead to a complete repeal. There is a chance this could happen as early as January or February of next year.
Other troubling developments include stripping the Bureau’s Office of Fair Lending and Equal Opportunity (OFLEO)—responsible for returning $450 million to millions of harmed consumers—of its enforcement powers. The OCC has also begun efforts to water down the Community Reinvestment Act (CRA), which helps underserved working families access mainstream financial products and services.
We Need to Fight for Effective Consumer Protections
Despite historically low unemployment and long-term stock market growth, the vast majority of Americans are still not financially better off than they were 10 years ago. The bottom 90 percent of income earners still have less wealth than they did before the crisis, while mean wealth for the top 10 percent has risen to over $4.1 million. A large racial wealth gap persists, with median Black and Latino wealth at $3400 and $6300 respectively, while median White wealth tops $140,000.
Protecting consumers is as important now as it was 10 years ago when the financial market collapsed. We still need sensible protections to prevent predatory behavior by financial institutions that continues today. Our policy brief outlines several actions that policymakers can take now and in the coming year to protect consumers. These include calling for a permanent director of the CFPB who recognizes the importance of strong consumer protections and supporting bills that preserve the Bureau’s strength.
Here are two easy actions advocates can take right now. First, as mentioned previously, Kathy Kraninger is still awaiting a confirmation vote by the full Senate to become the next Director of the CFPB, which could happen soon. Voice your opposition to her appointment now by contacting your Senators and asking them to vote against her confirmation to head the CFPB.
Second, in September of this year, Representative Maxine Waters (D-CA-43) introduced the Consumers First Act (H.R. 6972). This bill would undo the harmful actions taken by interim Director Mulvaney since he took charge of the Bureau. Contact your representative and ask them to support this bill.
To get the most up-to-date information about these developments and what you can do to advocate for strong consumer protections, sign-up for our consumer protections campaign!