Source: Fortune
Summary
The Consumer Financial Protection Bureau (CFPB) is under threat from the Trump administration, which has crippled the agency with spending freezes and cuts. A lawsuit by 21 states aims to block further gutting of the CFPB. A new report shows that Americans have lost nearly $19 billion since Trump took office due to CFPB cuts. The CFPB has returned tens of billions of dollars to Americans who were cheated or misled, and its shutdown would deepen Americans’ dependence on high-interest debt.
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The numbers tell one story. The CFPB has been a thorn in the side of banks and financial institutions, returning billions of dollars to consumers who were cheated or misled. The Trump administration’s efforts to gut the agency have resulted in a significant decrease in enforcement actions against banks. The CFPB’s Small Dollar Rule, designed to protect borrowers from abusive payday lending practices, may have unintended consequences. The agency’s shutdown would be a boon for banks and financial institutions, but a disaster for consumers.
The CFPB’s fate is now in the hands of the full U.S. Court of Appeals for the DC Circuit. The court’s decision will have far-reaching consequences for consumers and the financial industry.
As the CFPB’s authority is being challenged, Congress needs to explore credit alternatives to prevent consumers from being forced to rely on predatory lenders.
The CFPB’s shutdown would be a clear example of “consumer protection in reverse.”
Author: Evan Null
