With Donald Trump in the White House, Republicans apparently feel there has never been a more opportune time than now to unleash serious damage to the few rules protecting consumers from being cheated and lied to by Wall Street banks and predatory lenders.
Under the leadership of a president who has happily handed over the keys to the government to Goldman Sachs, politicians with careers funded by Wall Street want to strip back the bulk the reforms we passed after the financial crisis, reforms that were meant to keep big banks in check. It will only take one law to do it: the Financial CHOICE Act. Congress is primed to begin markups on the atrocious bill tomorrow morning.
Of course, a better name would be the #WrongCHOICEAct. The bill is designed to destroy the only agency fighting to defend ordinary Americans against big banks, the incredibly important Consumer Financial Protection Bureau. As if that weren’t enough, the bill also obliterates rules designed to prevent another catastrophic financial crash. Even a simple provision requiring financial advisors to act in their client’s best interest would never again see the light of day.
The Financial CHOICE Act is a choice all right – a choice to hand the power back to Wall Street.
This bill is chill-down-your-spine frightening in enough ways to fill a book. Gutting the CFPB would be a disaster for everyone but Wall Street. Since its creation in the aftermath of the financial crisis, the CFPB has won nearly $12 billion in relief for over 29 million Americans victimized by abusive practices.
Remember Wells Fargo’s unauthorized accounts? Thanks to their secret, widespread practice of opening credit card accounts for customers without their knowledge, hundreds of thousands of people have had their credit scores dragged down. The CFPB made that massive fraud a nationwide story. If the bureau hadn’t forced Wells Fargo to come to grips with the scale of its fraud, there’s no telling how many people would’ve been hurt.
But if the #WrongCHOICEAct passes, the CFPB will be powerless against scams like the Wells Fargo one.
We’re talking about the one and only government agency protecting regular people from fraud and theft by huge financial corporations.
The CFPB was the agency that stepped in and issued enforcements against massive student loan provider Navient for illegally cheating students out of repayment options. It also went after RD Legal, a legal firm that was scamming 9/11 first responders out of medical settlements. And it had the guts to stand up to two big banks — Citigroup and MasterCard — and issue big fines for a variety of illegal practices. And that’s just in the past year alone.
Given all those victories, it’s easy to see why Wall Street banks, shady corporations, predatory lenders — and their allies in Congress — want the CFPB out of the way.
The #WrongCHOICEAct was written by a collection of Senators who are deep in Wall Street’s pocket: there’s Rep. Anne Wagner (R-MO), a cosponsor, who got over $860K in campaign contributions last year; Rep. Blaine Leutkemeyer (R-MO), another cosponsor, who got $1.3 million; and of course the man who introduced the bill, Rep. Jeb Hensarling (R-TX), who got a whopping $1.9 million from Wall Street last year.
So what does this mean for you? American consumers will have fewer protections while banks will have more leeway to scam them, and more protection from redress in court. New rules on arbitration, payday loans and prepaid cards would vanish. The bureau will no longer perform regular audits to hold financial firms to the standards of the law.
If this bill passes, Americans would be left without the one agency in Washington devoted solely to consumer financial protection. Hensarling’s bill isn’t a Financial CHOICE, it’s the wrong choice – and it’s dangerously close to passing. We cannot make the wrong choice and allow the CHOICE Act to become law. And we must make its supporters in Congress pay a price.
This bill spits in the face of all post-crisis efforts to protect American consumers. But we don’t have to sit back and wait for it to pass.