Consumer Protection Agency Needs New Leader, Not New Mission
Over the last several months, the authority and drive of the Consumer Financial Protection Bureau has been eroded piece-by-piece.
Recently, The New York Times reported the agency’s pursuit of predatory payday lenders relaxed considerably amid intense lobbying of the industry to this administration. In just two months, hundreds of lobbyists from the industry will be in Florida for a retreat at the Trump National Doral Golf Club. Meanwhile, the CFPB’s interim director, Mick Mulvaney, the White House budget director, announced a halt to enactment of a rule imposed tight restrictions on short-term payday loans, which lead to some of the most extreme cases of abusive payday lending. He has also stopped enforcement actions against payday lenders who trick consumers into thinking that borrowing rates are less expensive than they truly are.
Then there was word the agency was dropping the investigation into the Equifax data breach. This was the incident that exposed the private, personal data of millions of Americans to hackers. To put this into perspective, criminals now have access to critical, sensitive data from 145 million Americans (including addresses and social security numbers), putting those consumers at high risk for fraud victimization that can damage their credit and financial security – and the company negligent in allowing this breach suffers no consequences.
But perhaps most disturbing was a recent internal memorandum obtained by NPR that revealed Mulvaney and Trump intend to take the CFPB in an entirely new direction – one that essentially steps away from the critical watchdog role that was intended when the agency was founded seven years ago, amid rife consumer abuse by lenders.
Consider that under the previous administration, Wells Fargo was ordered to pay more than $100 million in fines for opening millions of unauthorized credit card and checking accounts – though it was able to significantly curtail its liability with enforcement of a forced arbitration clause. Both Trump and Mulvaney have expressed a desire to strip the CFPB of the authority to act as a regulatory check against financial institutions in these kinds of cases.
Mulvaney has personally stepped in as a white knight of sorts to predatory payday lenders and other financial institutions. Take for instance the investigation he halted into the tactics employed by Gold Valley Lending. Our Miami consumer rights attorneys understand that in one example, the company used one customer’s $900 loan and spun it into a nearly $3,800 debt. The borrower had been facing eviction and was led to believe she could repay the $900 she borrowed in four installments. However, after she paid those four installments, the lender continued to withdraw money from her checking account. When she sought answers, she was told she agreed to several more additional payments. Under previous CFPB management, the agency sued the lender. When Mulvaney took over, he insisted the case be dropped – even over objections from career enforcement staff. It’s not all that surprising, though, when you consider Mulvaney received $62,000 in campaign contributions from payday lenders like this one.
These officials are harming consumers, but they should know: The CFPB had significant bipartsan backing by a majority of voters, many of whom continued to support the work being carried out under the previous director.
If you’re battling debt collection in Miami or the surrounding areas contact Jacobs Legal for a confidential appointment to discuss your rights. Call 305-358-7991. Also, don’t miss Miami Foreclosure Attorney Bruce Jacobs on 880AM/the Biz, every Wednesday at 5 p.m. on “Debt Warriors with Bruce Jacobs,” discussing foreclosure topics that matter to YOU.