March 7, 2018; Washington Post
As you begin your search for your first new home, or a car (new or used) that you will be making payments on, or a replacement for the washing machine that makes strange noises every time you use it, you’ll want to research your upcoming purchase. But will you also be able to do research on those who will be lending you the funds to make those purchases, and know that your rights as a consumer will be guaranteed? Going online to the ratings of organizations such as Consumer Reports to find the “best of the best” may point you in the right direction, but according to the Washington Post, under the Trump administration and the regulators he has appointed, there will be far fewer protections in place for the ordinary consumer.
NPQ addressed one aspect of this roll back of regulations in an article in December of 2017 on the Consumer Finance Protection Bureau and the rollback of its work as the Trump administration assumed leadership and brought much of its work to a halt. Since November 2017, when Mick Mulvaney assumed leadership, no consumer protection actions have moved forward from this agency. And the ripple effect has moved from one federal agency to another. The Labor Department has slowed implementation of a rule that would require financial advisors to act in the best interest of their clients. The Education Department has received much press for its withdrawal of protections for student borrowers.
The new approach—welcomed by banks and business leaders—has alarmed consumer advocates who fear it gives an advantage to Wall Street and other powerful industries while leaving ordinary Americans more susceptible to fraud, discrimination and predatory lending.
“There hasn’t been a lot that has been methodical about this presidency, but I do think Trump is systematically dismantling consumer protections,” said Mark Totten, a Michigan State University law professor who studies the enforcement of consumer protection laws and a 2014 Democratic candidate for Michigan attorney general.
The new direction affects agencies that touch nearly every aspect of consumer life, advocates say—from how Americans access credit and car loans to the safety of cribs and cellphones.
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The thinking behind this approach, advanced by Wall Street, big industry, and the Trump administration, is the philosophy of everyone making decisions as individuals.
“For too long, the guise of consumer protection has been used to benefit trial lawyers, government bureaucracies, and ambitious politicians looking for their next job,” Lindsay Walters, deputy White House press secretary, said in a statement. “The Trump administration has put the focus of consumer protection back where it belongs: on protecting consumers and enabling them to make better decisions for themselves.”
Trump proclaimed March 4–10 as “National Consumer Protection Week,” saying it is “an opportunity for Americans to learn about their consumer rights” so they can better protect themselves from predatory practices, identity theft and fraud.
As regulations are rolled back on the finance industry, including payday loan companies charging as much as 950 percent and banks who hold student loans for students defrauded by for-profit colleges, it may be up to the consumer as an individual to take action on their behalf if they feel they are wronged. Under this administration, they cannot count on the government to “go to bat” on their behalf. As NPQ said in December 2017: “If you were counting on someone, somewhere in government to watch out for you and your finances, that agency may now be a thing of the past.”
The takeaways for the nonprofit community are many. As consumer protections fade in the finance industry, nonprofits helping clients, particularly those most likely to be victims of predatory practices and fraud, understand that what they are dealing with may become a priority service. As consumer rights are seen only as individual rights, helping clients learn from one another’s experiences may provide useful guidance. Agencies and organizations may find new ways to collaborate and share both information and actions in order to protect and support those who will find themselves caught in the morass of deregulation and lack of consumer protection. Who knows? The mantra “buyer beware” may become a part of the nonprofit mission.—Carole Levine