In the wake of the economic crisis largely fueled by weak financial regulations and poor consumer protections, the federal government enacted the Consumer Financial Protection Bureau. It was part of the Dodd-Frank Consumer Protection Act, which included a number of elements that shielded consumers from abusive and predatory practices and extended power to hold violators to account.
Now, the Trump administration and Republican Congress have made it clear they intend to weaken the CFPB, and slash other consumer protection too.
Just recently, the Treasury Department issued a report that proposes a major weakening of the act, dramatically reducing the role of the federal government in overseeing the consumer financial services market. In particular, the CFPB would be constrained to a major degree. Republicans have been after the CFPB since it was created and began providing regulatory oversight for seven different federal agencies. While even lenders have seen the value in consolidation of regulatory compliance, conservative lawmakers continue to try to undercut the act and the consumer protection it provides.
As noted in a recent analysis by the editorial board at The Hill, the CFPB is one of the most effective parts of the Dodd-Frank Act, altering consumer climate from one in which buyers felt the need to constantly beware to one in which they could count on more fairness from lenders – or at least accountability if they were preyed upon. Although we’re only 10 years removed from the financial crisis, we’ve seen many have amnesia regarding just how dangerous the mortgage and consumer credit market can be – and were.
The report by the Treasury details a list of complaints, chiefly that the CFPB and other regulatory protections “hinder consumer choices,” and that regulatory compliance rules are a “burden,” especially on smaller companies. The editorial board noted that while there may be some grains of truth to that, the solution is to tweak those rules, rather than to scrap the entire system. By dramatically limiting the independence of the CFPB, the concern is that it will be a vehicle to completely gut the monitoring, enforcement and supervision of the agency and in turn allow special interests groups to once again be free to prey on consumers.
This is not a hidden agenda, considering the passage of the Financial Choice Act in the House of Representatives, which aims to repeal most of the Dodd-Frank Act. Keep in mind, before Dodd-Frank, we were reeling from a devastating financial crisis that resulted in nearly 9 million jobs lost, 10 million homes in foreclosure and $19 trillion in lost wealth. The safeguards put in place so that same kind of upheaval couldn’t happen again would be eviscerated by the FCA.
Consumer protection attorneys in Miami know this is exactly what special interest groups want – and it’s not in your interest. Abusive lending practices were so commonplace prior to Dodd-Frank, an that’s exactly what led to the crisis.
The reality is provisions of the Dodd-Frank Act are precisely what allowed the U.S. economy to achieve stability. Our unemployment rate is lower than it’s been in a decade, and banks are as profitable as ever. Gutting those protections is only going to set us back.
If you’re battling debt collection in Miami or the surrounding areas contact Jacobs|Keeley 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 and Court Keeley,” discussing foreclosure topics that matter to YOU.
Americans are better off with consumer protection in place, June 19, 2017, By David Reiss, The Hill
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Debt Collectors Catch a Break in Gorsuch’s First U.S. Supreme Court Opinion, June 19, 2017, Consumer Protection Lawyers in Miami Blog