Reports Claim Decline of Consumer Protections

Inside Subprime: April 24, 2019

By Aubrey Sitler

It has been well documented that the Consumer Financial Protection Bureau (CFPB) has taken a less aggressive approach to its legislative mandate to advocate for and play watchdog over consumer protection nationwide, but two recently published reports document just how much less proactive today’s CFPB has been.  One of these reports, ”Dormant: The Consumer Financial Protection Bureau’s Law Enforcement Program in Decline,”  was publicly released by the Consumer Federation of America (CFA); the other was issued exclusively to USA TODAY by Public Citizen.

According to Public Citizen’s report, which used a Good Jobs First database for its data analysis, in the last two years of the Obama administration, the CFPB issued 64 enforcement actions with fines of at least $5,000 against corporations. However, in the first two years of the Trump administration, these actions dropped by almost half to 35. This includes the five-month period from November 2017 to April 2018—the same period that followed inaugural CFPB Director Richard Cordray’s resignation—when the CFPB issued no enforcement actions. In fact, only 11 such actions have been issued since Cordray stepped down.

While the number of enforcement actions issued is in and of itself not enough to raise more than skepticism, the CFA report also found that overall CFPB enforcement activity has fallen 80 percent since 2015, when it reached its peak, and victims are now receiving an average of 96 percent less in monetary relief per case.

CFA also noted a stark decline in cases specifically related to the types of issues that consumers most commonly report to the CFPB through public complaints.

In combination, these statistics should raise alarm for anyone tracking just how well protected American consumers really are. Given that consumer complaints continue to pour into the CFPB on these very issues, the lack of enforcement action paired with the overwhelming decrease in restitution to consumers under Cordray’s successors indicates that the CFPB is failing to uphold its enforcement duties to protect consumers from exploitative corporate practices.

“If corporations can get away with breaking the law with no consequences, they will do it all the time,” Robert Weissman, president of consumer rights advocacy group and think tank Public Citizen, told USA Today. “We’ve seen dramatic shifts from the relatively modest enforcement efforts by the Obama administration to the barely visible, anemic efforts by the Trump administration.”

In response to the Public Citizen report, CFPB spokeswoman Marisol Garibay told USA TODAY: “The bureau is and will continue to vigorously enforce the law. In the first two months of 2019, the bureau announced five public enforcement actions.”

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