On Saturday, Politico reported that President Donald Trump’s officials at the Consumer Financial Protection Bureau (CFPB) are using the coronavirus pandemic as an excuse to suspend rules and oversight that require transparency from banks, credit card issuers, and credit bureaus.
“The Consumer Financial Protection Bureau is relaxing rules designed to shield Americans from abuse during the coronavirus crisis, saying the moves are necessary to give businesses flexibility during the pandemic,” wrote Katy O’Donnell. “But with the agency facing an unprecedented wave of consumer complaints as millions of laid-off workers deal with their creditors, lawmakers and consumer advocates charge that the bureau is exploiting the crisis to further a pro-industry agenda. They’re demanding that it set aside all rulemaking unrelated to the crisis and take a more forceful stance toward businesses that could use the chaos to rip off consumers.”
“A record number of consumer complaints have already been filed with the bureau — more than 42,000 in April alone, greater than in any other month since it opened in July 2011. The Justice Department recently brought its first fraud charges related to a small business lending program,” wrote O’Donnell. But, “The bureau, for its part, has not brought a single enforcement case during the crisis, and its enforcement actions fell by 80 percent from 2015 to 2018, according to an analysis by the Consumer Federation of America.”
“In March, the agency announced that it would relax or postpone various reporting requirements for mortgage lenders, credit card companies and other financial institutions,” continued the report. “Last month, the bureau issued guidance signaling that it would not enforce a requirement that credit reporting companies review consumer disputes within 30 days and would instead consider the companies’ ‘good faith efforts to investigate disputes as quickly as possible.'”
The CFPB’s director, Kathy Kraninger, has defended the CFPB actions, claiming that the rule changes free up resources for financial institutions to attend to the crisis, and insists that the CFPB is still taking action to protect consumers.
“The CFPB has a crucial role to play during this crisis to protect families,” said Sen. Elizabeth Warren (D-MA), one of the architects of the agency, in an email to Politico. “It must use its supervisory authority to monitor and detect consumer abuses and use its enforcement powers to punish companies that violate the law. Congress will be watching — and I will use every tool available to me to hold the agency accountable to its mission.”
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