Corporations Get Protection From Consumers


Consumer protection being steadily reduced

Corporations are heaving a collective sigh of relief: Like a new sheriff riding into town to rescue townsfolk from a gang of gunmen, Mick Mulvaney has reversed the mission of the Consumer Financial Protection Bureau (CFPB). No longer will the CFPB prosecute financial operators for misdeeds that abuse consumers. The overhauled CFPB is to “act with humility and moderation.”

President Trump pledged to get rid of the CFPB, perhaps because it had caught Wells Fargo and Citibank in credit protection rackets. He appointed Mick Mulvaney to shut it down.

Mulvaney had a better idea: Keep the agency, re-staff it with conservatives and reverse its roles. Instead of protecting consumers from abuse by financial institutions, CFPB will protect financial institutions from consumers harmed by financial gimmickry and trickery. Example: Mulvaney just stopped the planned prosecution of “payday lending.” That is the high-interest loan-sharking racket—often a front for organized crime involvement—that makes high-interest loans to low-paid workers who are tricked into agreeing to quick cash loans for which they may pay interest rates over 100-200% more than the loan.

Ending the CFPB will delight Republicans, especially those with an appreciation of irony. An agency meant to regulate the financial services industry will now stimulate it by keeping the industry safe from government interference. Future Citibank, Wells Fargo, and Mafia-supported rackets will be corrected by…what? Competition from each other?

Consumer protection is under conservative attack. Consumers will be foolish to stand by and watch this happen in silence. The Republican Party is quietly supportive of CFPB diminishment or elimination because Republicans objected to CFPB formation from its start under Obama. But what about elected Democrats? Will they also silently let the CFPB be turned into a protector of corporations from consumers? Answers will be discussed in a later post.

 

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