Penalties on the Dollar
Posted by Sarah Ludwig
This month, the New York Times reported on the lack of enforcement activity at the Securities and Exchange Commission and Justice Department, showing yet another free pass the Trump administration is granting to corporations engaged in various forms of malfeasance.
Same goes for the Consumer Financial Protection Bureau, where enforcement actions have all but screeched to a halt. The Trump administration has signaled to banks, payday lenders, debt collectors, and other financial services companies that the watchdog is off the street. It’s all part and parcel of the dismantling of our government institutions, endangering the financial security of millions of people, not to mention the safety and soundness of our financial system.
The CFPB has joined the long list of public institutions that now unabashedly advance the interests of Corporate America. (Is your business model predicated on consumer exploitation? Worry not! We have your back.)
When Mick Mulvaney came on board as the CFPB’s acting director last fall, he immediately froze all enforcement activity. Since then, the CFPB has resolved only one enforcement action initiated during Mulvaney’s acting directorship – against Citibank. But get this: Citibank itself prompted the action, voluntarily reporting that it had overcharged customers and committing to provide restitution. And Mulvaney slashed penalties and fees on more than half of all pending enforcement actions he inherited from his predecessor, the CFPB’s first director Richard Cordray.
The CFPB was created in response to the 2007 financial crisis, which among its lessons underscored that consumer protection is inextricably linked to the safety and soundness of our financial system. But the CFPB’s mandate and promise are also fundamentally linked to racial and economic justice. Through robust enforcement actions, supervision, and rulemaking, the CFPB would crack down on discriminatory and abusive financial practices that perpetuate racial inequality, segregation, and poverty.
Trump and his administration clearly stand for the opposite of racial and economic justice, and in their deregulation frenzy are paving the way for another financial crisis (not to mention environmental cataclysm). As we fight Trumpism, we must also build new institutions that ensure a just economy that works for all – planting seeds in hope of better days ahead.