Rhetoric vs. Reality: Trump CFPB Edition
And another "win" for Wells Fargo
In this story about Wells Fargo being released from one of many consent orders due to its past harmful business practices, there’s also an interesting note about the Trump CFPB.
But first:
Wells Fargo said the Consumer Financial Protection Bureau terminated a consent order related to the company’s compliance risk management program.
The order was issued in 2018 and is the 12th consent order closed by regulators since 2019 and the sixth since the start of the year, according to a Monday (April 28) press release.
Wells is one of America’s largest banks and a hotbed of customer-harming activity.
Wells Fargo has been struggling with regulatory issues for the better part of a decade following the “fake accounts” scandal at the bank in 2016. The Federal Reserve also placed an asset cap on the lender in 2018, limiting its balance sheet to $1.95 trillion.
Wells even hired a pair of humorous actors to lighten the mood about their business model:
Anyway, maybe they’re behaving better now - or maybe just reaping the benefits of a consumer protection agency that now may be better known as the Big Bank Protection Bureau.
Here’s the other fun piece from that story on Wells:
The CFPB is scaling back its enforcement of financial institutions. The agency said it wants to focus more on crimes against consumers — particularly military families — and less on things like digital payments, medical debt and student loans.
Two things:
No. The agency is NOT focusing more on crimes against consumers
Digital payments, medical debt, and student loans are BIG sources of financial harm against consumers.
But first, here are some of the CFPB’s recent gifts to fraudsters:
Just this week, CFPB dropped cases against fee-harvesting credit card Horizon and against payday parasite Credit Acceptance.
And there’s this:
The Consumer Financial Protection Bureau is announcing today that, with respect to the Payday, Vehicle Title, and Certain High-Cost Installment Loans Regulation, it will not prioritize enforcement or supervision actions with regard to any penalties or fines associated with the Payment Withdrawal provisions and the Payment Disclosure provisions once they become operative on March 30, 2025.
So deceptive credit card schemes, nefarious auto lenders, and payday loan sharks are getting off the hook - doesn’t sound very consumer protection-y to me.
But also: Medical debt and student loans are big sources of harm to consumers.
Americans hold some $49 billion in medical debt that’s in collections - and showing up on credit reports. And now, CFPB is dropping its focus on the harm this debt causes when it comes to access to credit, housing, and employment - even though the CFPB’s own evidence suggests medical debt is not an accurate predictor of creditworthiness.
It’s actually not clear what the CFPB is doing right now - other than surrendering cases and helping both Big Banks and small-time fraudsters get away with their thieving ways.