This is not a political article. Just one about the realities of people on Main Street being protected against financial problems and scams. With the assault on the Consumer Financial Protection Bureau (CFPB) and the regulations that led to its formation under assault by the current administration it is not far-fetched to imagine a new landscape in financial protection for the average person.
Let’s not kid ourselves. When people are scammed by some debt relief scheme, those that are harmed are the least able to defend themselves or get their money back. Historically, year-after-year and scam-after-scam the end results used to be the same, the average Joe got screwed and lost.
People with financial troubles just don’t have the money to be able to afford justice. When people say “I want to fight back against that company and get my money back.” That’s a wonderful position to want to right the wrongs you’ve suffered but the chances of Mary Main Street getting justice is just going to be slim in a new landscape of more limited government protections the Trump White House wants to roll out.
Government agencies like the CFPB are attacked by debt relief and financial companies as having too much power. They want that authority and power cut so they can get back to business as usual. Of course they do. Without the power of a large governmental agency to stand up for consumers, little will happen to protect the average person from the abuses of big companies.
Look at what happened to Wells Fargo after it was disclosed they had out-and-out scammed thousands of their customers.
Do you have any idea what happens when regulations and protections are erased that help to prevent consumers from being screwed? Yep, that’s right, they get screwed by those now erased protected activities.
Less consumer protection regulation means less consumer protection for all, republican and democrat alike.
Consumer reporter Bob Sullivan told me, “The future of consumer protection is really hazy right now, and that’s the biggest problem of all. No one knows what the ultimate fate of the CFPB will be — I suspect it will survive, but in much meeker form. What I sense is that companies are smelling blood, like they did during the run up to the housing bubble, and that’s the real problem. Good consumer protection requires a perceived threat, just like good policing requires a constant presence. No agency can catch all bad guys. But it can make clear that a good number of bad actors will pay a price, and work to scare other companies straight. If criminals know cops never visit a certain neighborhood, crime explodes. That’s what has happened in the past, and it will happen now. Individual consumers are relatively powerless in the face of a large firm. When companies know consumers don’t really have anywhere to turn to balance to scales, they act out. So even if the CFPB survives, and the FTC still files a few cases, etc…word on the street is that the Feds are backing off — so expect firms to push the envelope on consumer unfriendly practices, beginning now.”
Bob also said that State Attorneys General are still on the case to fight for some consumers. He’s right. But in the absence of a strong FTC or CFPB then we have to rely on states to bring actions. They don’t always. Take the incredible coincidence of Florida Attorney General Pam Bondi who asked for a political contribution from Trump and she received it just four days after dropping her case.
And there were more coincidences.
- Late August 2013: Bondi reached out to Trump, seeking financial support for her 2014 re-election campaign in Florida.
- Sept. 13, 2013: Bondi’s AG office acknowledged that it was investigating fraud allegations against “Trump University.”
- Sept. 17, 2013: Trump’s charitable foundation, which is legally prohibited from donating to political campaigns, cut a $25,000 check for a group supporting Bondi’s campaign.
- Oct. 15, 2013: Bondi’s office reversed course and said it wasn’t pursuing allegations made against “Trump University.”
- March 2014: Trump offered Bondi’s re-election campaign a generous deal while renting out his resort in Palm Beach. – Source
But let’s not think that was the only coincidence involving Trump. Texas Attorney General Abbott also dropped the fraud case targeting Trump and his university.
“The former deputy director of Abbott’s Consumer Protection Division now alleges that the attorney general office’s decision to quash the lawsuit against Trump — later a major donor to Abbott’s campaign — was a political move that left Texas consumers “high and dry.”
“The decision not to sue him was political,” John Owens told The Dallas Morning News. “Had [Trump] not been involved in politics to the extent he was at the time, we would have gotten approval. Had he been just some other scam artist, we would have sued him.”
These examples have more to do with the influence of money and politics that erodes protection for the average person.
The CFPB has been a powerful agency that has gone after bad actors and returned $11.7 billion in relief to more than 27 million consumers because of their actions.
And the CFPB agency that has protected all consumers from harm, well the White House now calls it an “unaccountable and unconstitutional new agency that does not adequately protect consumers.” – Source
So the next time you or someone you know gets scammed or wants justice against a financial criminal, you might just have to tell them “suck it up buttercup” because the banks and scammers neutered your protections.
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I do not mind a “tough love” approach to helping people. With that said, I truly think some of our leaders are out of touch with the realities faced by many Americans. Many of these lenders simply do not play by the rules. All the “tough love” placed against average Americans is not only going to enable Wall Street further.