All your consumer protections are dying

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Like a group of friends in a secluded cabin in a campy serial killer movie, your consumer protections are stealthily killed one by one, as you run around trying to put out other fires.

Well, do it two at a time. Yesterday, a federal judge ruled that Title X of the Dodd-Frank Act, which created the Consumer Financial Protection Bureau, is unconstitutional “in its entirety.” And the Trump administration’s Department of Labor did not appeal a court ruling that overturned the fiduciary rule, thus killing her.

But that’s not all the Trump administration has managed to roll back.

Consumer Financial Protection Bureau

The CFPB was created by Dodd Frank in the aftermath of the financial crisis to hold institutions accountable for their bad behviour.

The CFPB has gone after predatory student loan and payday lenders, banks like Wells Fargo who have swindled customers and, in the case of the lawsuit referenced above, was suing a company it alleged “Deceived 9/11 first responders with cancer and other illnesses as well as brain-damaged NFL football players over millions of dollars.”

In fact, for just about any financial offense now, advice when you’ve been scammed or think something illegal has happened – say, your student loan officer says you didn’t haven’t made X number of payments when you know you have, or Wells Fargo is opening an additional checking account in your name without your knowledge. This involves filing a complaint with the CFPB, which can then investigate the complaints. And for this reason, it has been the target of the “pro-business” lobby since its inception.

The decision is likely to be appealed, but that’s bad news for people who want to put more methods in place to vet lenders, banks and other financial institutions.

Department of Education

Education Secretary Betsy DeVos is working overtime to ensure that minority students and those who fall victim to predatory for-profit schools and student lenders have as little recourse as possible at the federal level (and state).

Like I previously covered, so far during his short tenure, DeVos has set rules that would protect students from suspended predatory for-profit schools and waived a 60-day grace period for students who have fallen into default to get their payments in order and avoid a 16% fee. Education is also telling states to drop efforts to regulate student loan services, and DeVos has rolled back rules intended to helping disabled students as well as advice on sexual assault case on university campuses.

Banking deregulation

Last month, federal officials proposed rescinding the Volcker Rule, another aspect of the Dodd-Frank Act that seeks to “prevent Wall Street from making risky bets with customer money for the bank’s own benefit. “, like I reported at the time. Kimberly Palmer, banking expert for NerdWallet, told me that consumers are unlikely to feel the effects of this action until there is “a problem, like a financial crisis or bankruptcy.” This is exactly when you want to know it.

President Trump also repealed a rule protecting African-American and Latino consumers from discrimination by auto lenders and signed a law that completely exempts small and medium-sized (read: most) banks from Dodd-Frank.

Fiduciary rule

I wrote on the Fiduciary rule before, and it’s one of those things that seems so obvious that she is scratching her head

What it would have done: Implemented by the Obama administration, it would have required all retirement advisers to act in the best interests of their clients rather than theirs, in other words, to comply the fiduciary standard. This is something that licensed financial planners and other types of advisers already have to do, but there is an entire industry of brokers and other types of financial advisers that don’t.

And that means if you go to one of them for investment advice, they might sell you a product (say, a certain fund) that gives them a bribe while you end up. with potentially lower returns and higher fees than another similar product. have produced. The Obama White House Council of Economic Advisers found that non-trustees are costing us average 401 (k) / IRA retirement investors, $ 17 billion per year.

This comes amid the US pension crisis, making it even more glaring that the government is doing nothing to ensure that the average American’s already insufficient retirement savings are not further reduced. by brokers looking to make a quick buck at our expense. To avoid this fate, you want to make sure that anyone you get financial advice from on specific investments and plans is a trustee. Here is some information about how to find one.

Now, Barron’s reports that the SEC create its own “best interests rule,” which also requires brokers to put the interests of their clients before their own. The SEC is hearing public comment until August 7.

Taken one by one, the decline in our basic consumer protections is alarming. All in all, this could be devastating for our collective financial future.

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