Photo: Gage Skidmore
Many people voted for Donald Trump because he said he’d help the average American have a better life.
However, President Trump did the opposite Friday by signing two executive orders to start the process of weakening new protections that protect consumers from fraud and abuse.
These protections, along with new oversight by the Consumer Financial Protection Bureau, have helped millions of consumers obtain billions of dollars in refunds.
New protections have helped stop fraud and abuse that drain billions of dollars from the bank accounts of American families. By making sure that companies follow the law, this makes it easier for banks that play by the rules to compete and prosper.
“Less than a decade ago, Wall Street and our economy were in freefall,” said Rohit Chopra, senior fellow at the Consumer Federation of America. “Toxic mortgages peddled illegally helped to cause the most severe financial crisis since the Great Depression. Today’s actions by the White House are an ominous sign that amnesia has set in.”
Wall Street needs a watchdog, not a lapdog, Chopra said, adding consumer protection is good not only for consumers but for the entire economy so the next financial crash can be prevented.
One executive order directs Gary Cohn, a Wall Street executive from Goldman Sachs, now installed in the White House National Economic Council, to begin the re-rigging of the financial system for special interests. It will begin the dismantling of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act that protects consumers, taxpayers, depositors, fair-dealing companies, and the economy from more reckless practices.
Another order will attempt to delay the Department of Labor's recent "best-interest" rule protecting retirement savers from having to pay high investment fees to Wall Street banks and insurance companies.
The rule would have required financial professionals who charge commissions to put their clients' best interests first when giving advice on retirement investments. It was aimed at blocking financial advisers from steering clients toward investments with higher commissions and fees that can reduce retirement savings.
The retirement advice rule was issued by the Obama Administration and was supposed to take effect in April. It was strongly opposed by the financial services industry, which argued the rule limits retirees' investment choices by forcing asset managers to steer them to the lowest-risk options.
Ed Mierzwinski, consumer program director for the U.S. Public Interest Research Group, said:
We will fight to protect Wall Street reform and the highly-successful Consumer Financial Protection Bureau, the agency at the front lines of consumer protection that has been targeted by big Wall Street banks, debt collectors, and even payday lenders because it works for consumers, not them.
We will also defend the CFPB's extraordinary director, Richard Cordray. We cannot let Wall Street convince the president and Congress to re-rig the system so they win and everyone else loses."
While the policy changes Trump is proposing in the two executive orders are gigantic lies for people who voted for him, the language of the executive orders also is a lie. It states that getting rid of these protections will help consumers make better choices. Lies, lies, and more lies.
As I’ve said before, save all the money that you can in an Emergency Fund. Trump’s proposals are going to lead to a huge recession. Wall Street was unleashed before. The result was the harmful Great Recession.