Since 2010, the Dodd-Frank Act and the federal Consumer Financial Protection Bureau have protected American consumers from unfair financial practices. But now the Financial CHOICE Act could, in President Trump’s words, be a “major haircut” to the organization and its ability to protect citizens.
Early in his presidency, Donald Trump called Recession Era financial regulations including the Dodd-Frank Act and the creation of the Consumer Financial Protection Bureau (CFPB) bad for business. He promised to “do a big number on” the Wall Street reform laws.
These are laws designed to protect the American people against bad choices and abusive practices by large financial institutions and lenders. Since 2010, they have put nearly $12 billion back into the pockets of 29 million consumers. The CFPB has also established “rules of the road” that make sure lenders, debt collectors, and credit card companies treat their customers fairly.
Financial CHOICE Act Weakens Consumer ProtectionsBut some legislators object that the laws put regulators in charge of the banks. In April, Republican legislators introduced the Financial CHOICE Act (H.R. 10). The bill would:
Make it harder for regulators to identify banks in risky
Repeal laws allowing for bank bail outs
Allow banks and credit card companies to charge more for
Weaken the Consumer Financial Protection Bureau
The bill would also narrow the agency’s focus and ability to supervise banks or regulate the market. It would also mandate that the newly named Consumer Law Enforcement Agency act “without Government interference or subsidies” and encourage increased competition and consumer choice.
Michigan Legislators Are DividedMichigan Representative Bill Huizenga, supports the legislation, calling the Dodd-Frank Act “the real middle finger to the American people.” But fellow Michigan Congressman John Conyers, a ranking member of the House Judiciary Committee says:
“H.R. 10 is a sprawling piece of legislation that would destroy key financial regulations and consumer protections put in place by the Dodd-Frank Wall Street Reform and Consumer Protection Act.”Legislators, consumer advocates, and financial lobbyists have all spoken out strongly on both sides, and many amendments have already been proposed. While the bill recently passed out of Congressional committee, commentators believe it is unlikely to pass the Senate unchanged. That’s good news to American consumers who rely on CFPB regulations to protect them from abuse by big banks and credit collectors looking to make a profit.
Dani K. Liblang is a consumer protection attorney at The Liblang Law Firm, P.C., in Birmingham, Michigan. If you have been the victim of abusive collections practices, contact The Liblang Law Firm, P.C., for a free consultation.