How Trump is making it easier to exploit consumers

Richard Cordray, who has been the head of the US Consumer Financial Protection Bureau (CFPB) since 2012, announced that he will be resigning before the end of his five-year term.
His interim replacement will be self-described “right-wing nutjob” Mick Mulvaney.
Currently the Trump administration’s Office of Management and Budget Director, Mulvaney is a longtime politician who has tirelessly worked to dismantle regulations and, as CBS News notes, “a longtime critic of the agency.” Nominating Mulvaney, in other words, is functionally equivalent to eliminating the agency entirely.
This ominous sign is the latest example of the Trump administration’s determination to dismantle critical regulations of big business.
And it illustrates how the executive branch now unilaterally makes public policy.
Trump and a Republican Congress haven’t yet passed major legislation, but they can achieve a lot of policy objectives without doing so.
One of the most important components of the flawed but valuable Dodd-Frank Wall Street Reform and Consumer Protection Act was the creation of the CFPB.
The bureau is empowered to regulate financial products and services to prevent the exploitation of consumers.
What Trump, congressional Republicans, and the financial sector hated about Cordray is that he did his job.
According to Ranae Merle of the Washington Post, “Republicans had become increasingly exasperated that Cordray continued to press for aggressive rules disliked by the business community.
Trump has on at least two occasions griped about Cordray in private and wondered what to do about his tenure.” When Trump said he would “drain the swamp,” he apparently meant that he would clear out anything that would impede Wall Street from exploiting consumers.
Wall Street and Republicans have tried to stymie the CFPB from the beginning.
The lesson Republicans took from the disastrous 2008 financial collapse that was created in part by banks taking advantage of customers was that everything was just fine.
Senate Republicans were determined not to let Obama nominate anyone to head the agency, and carried out a lengthy filibuster against Cordray, forcing Obama to install him as a temporary recess appointment. (Cordray was later confirmed for a full term.) They haven’t changed at all, and the idea that Trump would orient the party in a more anti-Wall Street direction has been revealed as the ludicrous fantasy it always was.
Congress acting against CPFB regulations may have been the reason Cordray was frustrated enough to leave early.
Last month, with Vice-President Mike Pence casting the deciding Senate vote, Congress killed a new rule that protected the ability of consumers to file class action lawsuits against banks, rather than being forced into arbitration that generally tilts towards the interests of the corporation rather than the customer.
Still, because Senate Republicans don’t have the votes to break a Democratic filibuster and overturn or rewrite Dodd-Frank, there’s a limit to what Congress can do to eviscerate the CFPB.
And that’s where Trump’s appointments come in.
The Securities and Exchange Commission is now being headed by former Wall Street lawyer Jay Clayton, who is universally expected to treat his former employers much more kindly than his predecessor, Mary Jo White. — Reuters

Scott Lemieux