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Under Trump, enforcement of consumer financial laws drops sharply, especially in areas with the highest complaints

Consumer Federation of America Report on Consumer ComplaintsThe number of publicly announced enforcement actions under the Trump administration at the Consumer Financial Protection Bureau is dropping sharply, according to a report by the Consumer Federation of America.

“Law enforcement activity at the CFPB has dropped precipitously under the Trump Administration’s leadership,” said Christopher Peterson, director of financial services for the federation and author of the report.

The bureau is charged with enforcing federal consumer financial law and bringing legal action against companies that violate that law. The bureau also has the authority to seek restitution for consumers and levy fines when it finds violations. The report finds that activity in both of these areas is on the decline – overall enforcement activity is down by 80 percent from the bureau’s peak in enforcement actions in 2015 and average relief to victims is down by 96 percent per case.

Declines occur in areas with highest consumer complaint volume

Public enforcement actions involving credit reporting and debt collection, which saw the highest complaint volumes in recent years, have dropped significantly. In addition, under the Trump administration, the bureau hasn’t announced any monetary relief in the high-volume complaint areas of credit reporting, debt collection, or student lending.

More findings include, under the Trump administration, law enforcement has declined sharply on:

  • Illegal credit reporting practices. The bureau has announced only two cases enforcing the Fair Credit Reporting Act. It agreed to settle both cases without providing any restitution to victims of illegal practices.
  • Illegal debt collection practice. Under Acting Director Mick Mulvaney and Director Kathy Kraninger, the bureau has announced only one case enforcing the Fair Debt Collection Practices Act. The bureau agreed to settle this case without ordering any restitution to victims of illegal debt collection practices.
  • The home mortgage lending market. Under prior leadership, the bureau announced 61 mortgage lending cases that returned nearly $3 billion in restitution to consumers at a rate of more than $10 million per week. Under Mulvaney, consumer relief per week in mortgage lending declined by over 99 percent to less than $5,000 a week for the entire nation. Under Kraninger, the bureau hasn’t announced a single mortgage lending related case, nor any restitution for consumers.
  • The student loan market. Under former Director Richard Cordray, the bureau announced 15 student lending related cases with an average of $47.5 million in consumer relief per case. Under the Trump administration, the bureau hasn’t announced or resolved any student lending enforcement cases and hasn’t provided any restitution to consumers.

In addition, the bureau has failed to:

  • Enforce consumer protection laws prohibiting discrimination. Under Cordray, the bureau announced 11 cases enforcing the Equal Credit Opportunity Act with average consumer relief of more than $56 million per case. Under the Trump administration, the bureau hasn’t announced or resolved any cases alleging discrimination and hasn’t provided any restitution to consumers.
  • Provide adequate restitution to victims of deceptive practices. Under prior leadership, the bureau announced 116 enforcement cases against consumer finance companies that used deceptive or misleading practices producing average consumer relief of more than $94 million per case. Although Kraninger has announced three enforcement cases alleging deceptive practices, the bureau agreed to settle each case without ordering any restitution for victims.

“It is simply unacceptable for a consumer protection agency to turn its back on consumers that have been harmed by their financial institution’s deceit,” said Peterson. “Consumers have a right to expect that the federal government will enforce our consumer protection laws.”

Copyright 2019, Rita R. Robison, Consumer Specialist

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