Trump reneging on his promise to protect everyday Americans
Congressional Democrats and Consumer Financial Protection Bureau workers protest the closing of the CFPB outside its headquarters on Feb. 10, in Washington. Credit: Getty Images for MoveOn/Jemal Countess
President Donald Trump has long promised to champion "forgotten" everyday Americans and protect the working class, and to save consumers billions of dollars through deregulation and other measures.
Yet, he spent his first two months in office dismantling the one piece of the federal bureaucracy dedicated to those tasks: the Consumer Financial Protection Bureau.
The CFPB emerged in 2010, a response to the 2007-08 financial crisis and the recession that followed. It's easy to forget what we experienced then: extraordinary upheaval as the housing and mortgage markets — built on their own house of cards — collapsed, financial giants went under, and the broader economy's vulnerabilities were exposed for all to see.
The bureau, introduced as part of new federal regulations, sought to hold banks, mortgage companies and other financial institutions accountable for how they treat consumers, while enforcing existing and new laws and protecting consumers from predatory practices. The simple goal was to make sure what happened in 2008 never happened again.
But Trump has attempted to undo much of that work. The bureau dropped nearly a dozen enforcement cases, including one against Capital One for cheating customers out of $2 billion worth of interest payments and another against a Berkshire Hathaway-owned mortgage company that allegedly gave manufactured-home loans to those who couldn't afford them. And despite a federal judge's preliminary injunction requiring the bureau to bring employees back and continue its work, all indications are that staffers are no longer doing the examination and enforcement they should be doing. Instead, according to a Bloomberg Law report, they've been asked to only "review and organize your files."
An organized hard drive and filing cabinet is not going to help "forgotten" Americans.
So far, Congress isn't offering any help, either. The Senate recently sided with the banking lobby and voted to overturn a rule that capped banks' overdraft fee at $5. Senate Banking Committee chairman Tim Scott (R-S.C.) attempted to argue that consumers should be allowed to use overdraft "protection," regardless of the fee banks charge, however they see fit — even if it means they're spending money they don't have.
That's a risky path for Americans already on the edge.
And it's especially dangerous given the current precariousness of the nation's economy. Consumers have watched with trepidation as Trump introduced global tariffs on a massive scale that threaten to increase the cost of goods and cause deep economic turmoil.
How big business and larger financial institutions respond remains to be seen. But as prices increase, consumer budgets will tighten. If history is a guide, more Americans will be forced to take on more debt, to borrow on high-interest credit cards or rely on loans to make big purchases like cars and homes. Without the CFPB, and legal protections like those instituted 15 years ago — some of which were repealed during Trump's first term — consumers will again be susceptible to price-gouging, predatory lending and other wrongdoing that could get them into even more dangerous fiscal waters. Just when they likely will need a watchdog, it is being defanged.
With the 2008 financial crisis still lingering in our rearview mirrors, we should know better. During the Great Recession between late 2007 and mid-2009, without strong consumer protections in place, foreclosures and evictions skyrocketed, unemployment rose above 10%, and personal bankruptcy filings nearly doubled.
Left without those guardrails once more, the at-risk Americans Trump once promised to help will again be walking a treacherous tightrope without any net.
Columnist Randi F. Marshall's opinions are her own.
Randi Marshall is a member of the Newsday editorial board.
