The Trump administration would like to make it easier for shady Wall Street firms to rip you off. To this end, it is working to undo one of the smartest things that Congress ever did.
Recognizing that dishonest lending practices led to the 2008 financial crash, Congress created the Consumer Financial Protection Bureau to crack down on such financial sleaze. It wisely designed the CFPB as strong agency with built-in independence from political pressures and big-bucks lobbying.
Now, President Donald Trump has tapped one of the CFPB’s leading opponents to run it, a move that will harm every American who uses money — to the delight of shady subprime lenders, payday loan firms and credit card companies that gouge customers.
Trump’s pick, Office of Management and Budget Director Mick Mulvaney, has called the CFPB “sick, sad” and “the very worst kind of government entity.” As a member of Congress, he co-sponsored legislation to eliminate it. He arrived on the job Monday with doughnuts for staff, proclaiming that his charge was to make the agency stop “trampling on capitalism.”
Under just-departed Director Richard Cordray, the CFPB defended ordinary Americans from rip-offs in mortgages, credit cards, student loans, payday lending and more, securing $12 billion in relief for Americans gouged by some financial firms. It has forced banks and other financial businesses to make clearer disclosures so that those getting mortgage loans, for example, can actually know what they’re agreeing to.
Before leaving, Cordray appointed his chief of staff, Leandra English, as deputy director. The law that created the CFPB specifies that the deputy director shall act as director in the event of a vacancy at the top, and the law’s legislative history makes it clear that’s what Congress meant. And English unmistakably has the capacity, experience and skills to serve as acting CFPB director and keep the bureau running effectively.
But Trump instead installed his designated hatchet man as acting director to dismantle consumer protections. English filed a lawsuit to block this power grab. A federal judge appointed by Trump refused to block the appointment, but English’s attorney says he is determined to continue the fight.
Don’t be fooled into thinking this is some obscure legalistic squabble. It will affect all of us.
The U.S. economy works better when financial markets serve, not harm, ordinary Americans. We saw in 2008 what happens when abuses run rampant. The American people, particularly low-income Americans and people of color who have been historically targeted by unscrupulous financial firms, deserve to have their pocketbooks protected by a strong consumer watchdog led by a director who genuinely looks out for regular folks.
That’s precisely what we won’t have if Mulvaney is allowed to run the CFPB despite the legal clouds over his appointment. Watch your wallet.
Orson Aguilar is president of The Greenlining Institute. He wrote this for the Progressive Media Project and Tribune News Service.