Category: Look Out for the Little Guy

Trump picks fight with CFPB, calls agency a ‘total disaster’

President Trump is picking another fight with the Washington swamp by naming his own man as temporary boss of a federal agency conservatives hate.

“The Consumer Financial Protection Bureau, or CFPB, has been a total disaster as run by the previous Administrations pick,” he tweeted Saturday.

“Financial Institutions have been devastated and unable to properly serve the public. We will bring it back to life!” the tweet said.

Leadership of the bureau — the brainchild of liberal Massachusetts Sen. Elizabeth Warren — was put in play Friday by the resignation of director Richard Cordray.

Before he left, Cordray named his chief of staff as his interim replacement. Cordray’s permanent replacement will be decided by Trump and the Senate.

Trump wants Office of Management and Budget director Mick Muvaney to be the agent’s interim boss. Mulvaney has called the agency “a sad, sick joke.”

Senior administration officials said Saturday that a 1998 law trumps the agency’s internal rules — and they won’t shy from a court fight over the dueling interim directors.

“We have gone out of our way to avoid an unnecessary legal battle with Director Cordray,” one official said. “But his actions indicate that he wants to provoke one.”

[New York Post]

Reality

A “disaster”? Maybe fore Trump’s Wall Street friends. Below are several key accomplishments that have benefited consumers since the Dodd–Frank Wall Street Reform and Consumer Protection Act was enacted:

Securing Almost $12 Billion in Consumer Relief

  • The CFPB helped over 29 million individual consumers receive $11.8 billion dollars in due relief, while responding to over 1 million consumer complaints since openings its doors.[2]
  • Through enforcement action alone, the CFPB reduced $7.7 billion in consumer debts while winning $3.7 billion in compensation for consumers.[3]
  • Nearly 50 million households have benefited from new CFPB mortgage servicing protections that protect consumers from surprise costs and terms when repaying their mortgage, and offer additional protection if a borrower falls behind on their mortgage payment.[4]
  • More recently, the CFPB, partnering with the Los Angeles City Attorney’s Office and the Office of the Comptroller of the Currency, uncovered deceptive banking practices at Wells Fargo Bank defrauding millions of customers.[5]  Enforcement action by the CFPB forced Wells Fargo to pay full refunds to consumers harmed by illegal practices and to pay a $100 million penalty for their wanton behavior.

Protecting Service Members from Predatory Practices

  • The CFPB’s enforcement actions provided $130 million in due compensation to service members, veterans, and their families that were harmed by illegal private sector predatory practices.[6]
  • In collaboration with the Department of Defense (DOD), the Office of Servicemember Affairs at the CFPB visited more than 145 military installations, handling over 71,000 consumer complaints from service members and their families,[7] and advised DOD on better rules to protect service members from financial exploitation.[8]

Saving Consumers $16 Billion in Undisclosed Credit Card Fees

  • The Credit Card Accountability, Responsibility and Disclosure (CARD) Act, now under CFPB jurisdiction, reined in the usurious late fees charged on credit cards, limited predatory practices targeting young consumers on college campuses, curtailed sharp interest rate hikes, increased access to consumer credit, and made credit card costs more transparent, saving consumers more than $16 billion in undisclosed fees.[9]
  • The number of new consumer credit cards increased steadily since implementation and enforcement of the CARD Act to 6.5 million new credit cards and $37.5 billion in available credit in July of 2016.[10]
  • In collaboration with private industry, the CFPB made it easier for stay-at-home spouses to gain access to credit cards by allowing them to use total household income in their applications for new accounts or higher credit limits.  This has helped more than 16 million married individuals who do not work outside the home access necessary credit.

Trump repeals consumer arbitration rule, wins banker praise

President Trump on Wednesday signed a repeal of the Consumer Financial Protection Bureau’s rule on forced arbitration, winning praise from banking and business groups.

Trump approved the resolution to repeal the CFPB rule, meant to prevent banks and credit card companies from blocking customers from joining class-action lawsuits against them, in a private Oval Office signing.

The House passed a resolution to repeal the rule in July, which passed the Senate two weeks ago.

Trump was joined by the heads of several banking lobbying groups that opposed the CFPB rule, contending it would kill cheaper options for consumers while enriching trial lawyers.

The chiefs of the Consumer Bankers Association, Independent Community Bankers of America, National Association of Federally-Insured Credit Unions and several other groups attended the signing.

The arbitration rule repeal is a major victory for finance and business groups, which promised to fight the measure soon after it was released in July. Critics say the rule went too far in restricting arbitration based on a CFPB study they consider flawed and misleading.

“Arbitration is a well-established and tested process that offers better results for consumers and helps avoid frivolous class-action suits,” said Independent Community Bankers of America President Camden Fine.

“[Independent Community Bankers of America] thanks the president for swiftly signing this measure into law because it preserves community banks’ contractual right to pursue fair and timely resolution through arbitration and avoid prohibitively expensive and protracted litigation.”

Richard Hunt, Consumer Bankers Association president and CEO, said the arbitration rule “was about protecting trial lawyers and their wallets,” praising Trump and Congress for ensuring “consumers have the necessary tools to receive relief without going through drawn-out class action proceedings.”

Dan Berger, National Association of Federally-Insured Credit Unions president and CEO, said the group “was honored to have been invited to the White House to watch the undoing of a rule that likely would have had negative effects on the credit union industry.”

Democrats and the CFPB criticized Trump, claiming he sides with banks over consumers. They’ve long called for action on forced arbitration, which they say denies fraud victims basic legal rights, and the CFPB rule was the most ambitious effort to regulate the practice.

CFPB Director Richard Cordray said “in signing this resolution, the president signed away consumers’ right to their day in court.”

“This action tips the scales of justice in favor of Wall Street banks less than 10 years after they caused the financial crisis,” said Cordray, who asked Trump on Monday to spare the rule. “By blocking our arbitration rule, this action makes it nearly impossible for ordinary people to stand up for themselves against corporate giants like Wells Fargo and Equifax.

“Now more than ever, it is critical that the Consumer Bureau remain a strong check on financial companies,” he said.

Better Markets, a nonprofit aligned with the CFPB, said, “Today, the Trump administration and Republicans in Congress have made it clear, they are on the side of Wall Street banks not Main Street consumers.”

Rep. Tim Ryan (D-Ohio) called Trump’s repeal “a disgrace,” tweeting that “If [Trump] cared about working people he’d veto this swampy legislation.”

[The Hill]

Pence casts tie-breaking vote to make it more difficult for consumers to sue banks and credit card companies

The Senate has voted to nullify a consumer-oriented rule that would let millions of Americans band together to sue their banks or credit card companies.

Vice President Mike Pence cast the tie-breaking vote Tuesday night to stop the rule from going into effect – the fifth instance he has broken a 50-50 tie since taking office.

Many consumers must go through an arbitrator to resolve financial disputes, but the Consumer Financial Protection Bureau finalized a rule that bans most types of mandatory arbitration clauses.

The rule exposed banks to large class-action lawsuits. Supporters say that possibility would help ensure banks, credit card companies and other lenders treat consumers appropriately.

The vote comes months after House action and reflects the effort of the Trump administration and congressional Republicans to undo regulations that the GOP argues harm the free market.

Democrats said before the vote that nullifying the rule would be a victory for Wall Street.

The resolution will now go to President Donald Trump, who is expected to sign it into law.

[Business Insider]

 

Trump offered a grieving military father $25,000 in a call, but didn’t follow through

President Trump, in a personal phone call to a grieving military father, offered him $25,000 and said he would direct his staff to establish an online fundraiser for the family, but neither happened, the father said.

Chris Baldridge, the father of Army Cpl. Dillon Baldridge, told The Washington Post that Trump called him at his home in Zebulon, N.C., a few weeks after his 22-year-old son and two fellow soldiers were gunned down by an Afghan police officer in a suspected insider attack June 10. Their phone conversation lasted about 15 minutes, Baldridge said, and centered for a time on the father’s struggle with the manner in which his son was killed.

“I said, ‘Me and my wife would rather our son died in trench warfare,’ ” Baldridge said. “I feel like he got murdered over there.”

Trump’s offer of $25,000 adds another dimension to the president’s relations with Gold Star families, an honorific given to those whose loved ones die while serving in support of the nation’s wars. The disclosure follows questions about how often the president has called or written to grieving military families.

The Washington Post contacted the White House about Baldridge’s account on Wednesday morning. Officials declined to discuss the events in detail.

But in a statement Wednesday afternoon, White House spokeswoman Lindsay Walters said: “The check has been sent. It’s disgusting that the media is taking something that should be recognized as a generous and sincere gesture, made privately by the President, and using it to advance the media’s biased agenda.”

Trump said this week that he has “called every family of somebody that’s died, and it’s the hardest call to make.” At least 20 Americans have been killed in action since he became commander in chief in January. The Washington Post interviewed the families of 13 and found that his interactions with them vary. About half had received phone calls, they said. The others said they had not heard from the president.

In his call with Trump, Baldridge, a construction worker, expressed frustration with the military’s survivor benefits program. Because his ex-wife was listed as their son’s beneficiary, she was expected to receive the Pentagon’s $100,000 death gratuity — even though “I can barely rub two nickels together,” he told Trump.

The president’s response shocked him.

“He said, ‘I’m going to write you a check out of my personal account for $25,000,’ and I was just floored,” Baldridge said. “I could not believe he was saying that, and I wish I had it recorded because the man did say this. He said, ‘No other president has ever done something like this,’ but he said, ‘I’m going to do it.’ ”

The president has faced worsening backlash since details emerged of his phone call Tuesday with the widow of Sgt. La David T. Johnson, who was killed Oct. 4 alongside three other U.S. soldiers in Niger. After not addressing the incident for 12 days, Trump on Monday falsely claimed that previous presidents never or rarely called the families of fallen service members. In fact, they did so regularly.

[Washington Post]

Trump: I want to focus on North Korea not ‘fixing somebody’s back’

President Trump praised health care block grants on Saturday, saying they allow the states to focus on health care, but said he would rather focus his energy on tensions with North Korea than “fixing somebody’s back or their knee.”

“You know in theory, I want to focus on North Korea, I want to focus on Iran, I want to focus on other things. I don’t want to focus on fixing somebody’s back or their knee or something. Let the states do that,” the president told Mike Huckabee on the Trinity Broadcasting Network’s “Huckabee.”

“The block grant concept is a very good concept, and if you have good management, good governors, good politicians in the state, it’ll be phenomenal,” he continued.
“I could almost say we are just about there in terms of the vote, so I expect to be getting health care approved,” he said.

Trump’s comments come after Senate Republicans failed twice this year to fulfill a seven-year campaign promise of repealing and replacing ObamaCare.

The latest repeal and replace failure was the Graham-Cassidy bill, which included block grants to states.

However, the legislation failed after Sens. John McCain (Ariz.), Rand Paul (Ky.) and Susan Collins (Maine) announced their opposition to the bill last month, effectively killing it.

Trump has expressed frustration in his Republican colleagues in the Senate for their health care failure, so much so that he called Senate Minority Leader Charles Schumer (D-N.Y.) on Friday to discuss the issue.

The move is likely to unsettle Republicans on Capitol Hill who have been working with Trump on tax reform in recent weeks.

[The Hill]

Trump to cut pay raises for government workers

President Trump sent a letter to Speaker Paul Ryan (R-Wis.) on Thursday announcing his intention to cut pay raises for civilian government workers.

In the letter, Trump cited his authority in times of “national emergency or serious economic conditions affecting the general welfare” to make adjustments to the 2018 pay schedule for federal employees.

Under the previous plan, workers were scheduled for a 1.9 percent bump. Trump will use his authority to lower that to 1.4 percent.

“We must maintain efforts to put our Nation on a sustainable fiscal course,” Trump wrote.

“A pay increase of this magnitude is not warranted, and Federal agency budgets could not accommodate such an increase while still maintaining support for key Federal priorities such as those that advance the safety and security of the American people.”

Pay raises for government workers outside of Washington, D.C., will average only 0.5 percent and will be specified in a coming executive order, Trump said.

The White House did not respond to a question about how much the government would save from the action or whether it had discussed the matter with offices on Capitol Hill.

Trump will maintain the 2.1 percent pay increase for members of the military.

“I strongly support our men and women in uniform, who are the greatest fighting force in the world and the guardians of American freedom,” Trump wrote. “As our country continues to recover from serious economic conditions affecting the general welfare, we must work to rebuild our military’s readiness and capabilities.”

[The Hill]

Trump Picks Lobbyist Linked to Forced-Abortion Sweatshop Scandal as Overseer of Worker Protections in U.S.

President Donald Trump’s pick to be deputy secretary for the Department of Labor is a former lobbyist who worked to allow companies to run sweatshops in the Northern Mariana Islands, a territory of the United States.

Mother Jones reported on Tuesday that Trump nominee Patrick Pizzella was linked to a scandal involving disgraced former Republican lobbyist Jack Abramoff.

Pizzella reportedly helped defeat a bipartisan effort to clean up sweatshops on the islands in the 1990s after horrific details of worker conditions and forced abortions came to light.

According to Mother Jones, Pizzella and his colleagues arranged trips to the Northern Mariana Islands for more than 100 members of Congress in order to defeat the measure.

Read the entire report here.

[Raw Story]

Interior Dept. Halts Study Into Appalachian Mining Technique’s Likely Health Hazards

The Trump administration has halted a study of the health effects of a common mining technique in Appalachia, which is believed to deposit waste containing toxic minerals in ground waters.

A letter from the Interior Department directed the National Academies of Sciences, Engineering and Medicine to “cease all work” on a study of the potential health risks of mountaintop removal mining for people living near surface coal mine sites in central Appalachia. The Interior Department acknowledged in a statement that it had “put on hold” $1 million in funding for the two-year project as part of a review of its grants, which is focused on “responsibly using taxpayer dollars.”
“The Trump Administration is dedicated to responsibly using taxpayer dollars and that includes the billions of dollars in grants that are doled out every year by the Department of the Interior,” the statement said.

Still, the National Academies — a nongovernmental institution that researches and advises the government on science and technology — plans to move forward with part of the research, and will hold previously scheduled public meetings this week in Kentucky, the Academies said in a statement.

Political reaction was swift to the Trump administration’s decision to suspend the study of “the potential relationship between increased health risks and living in proximity to sites that have been or are being mined or reclaimed for surface coal deposits,” which began last year and was expected to take two years to complete.

“Mountaintop removal mining has been shown to cause lung cancer, heart disease, and other medical problems,” Democratic Rep. Raul Grijalva of Arizona, the ranking democrat on the House Committee of Natural Resources, said in a statement.
“Clearly this administration and the Republican Party are trying to stop the National Academy of Sciences from uncovering exactly how harmful this practice is,” Grijalva said.

“It’s infuriating that Trump would halt this study on the health effects of mountaintop removal coal mining, research that people in Appalachia have been demanding for years,” said Bill Price, Senior Appalachia Organizing Representative for environmental advocacy group Sierra Club’s Beyond Coal campaign.

[CNN]

Trump Endorses Repeal-First Strategy if Health Care Deal Not Reached

As Senate negotiations continue over the stalled Republican health care bill, President Donald Trump Friday morning called on senators to pass a simple repeal of Obamacare now and focus on replacing it later this year if no deal is reached.

Trump’s tweet came just after Sen. Ben Sasse, R-Neb., sent a letter to the White House urging the president to support a repeal-first, replace-later strategy if there is no agreement by the time senators return from their week-long Fourth of July recess on July 10.

The idea has been floated by some Republicans since a planned Senate vote on the GOP Better Care Reconciliation Act was postponed Tuesday because leaders were unable to secure the 50 GOP votes needed to pass it.

Sasse has been working quietly with the White House on the idea, according to a Senate Republican aide who said the administration was receptive to the idea.

“You campaigned and won on the repeal of Obamacare. So did every Republican senator. We should keep our word,” Sasse wrote in the letter.

“On the current path, it looks like Republicans will either fail to pass any meaningful bill at all, or will instead pass a bill that attempts to prop up much of the crumbling Obamacare structures,” he added. We can and must do better than either of these — both because the American people deserve better, and because we promised better.”

Sasse also asked the president to call on Congress to cancel its scheduled month-long August recess to work on a replacement bill for a Labor Day vote. “After we gave our word to repeal and replace Obamacare’s monstrosity,” he said, “we should not go back to our states during August as the American people struggle under fewer choices and skyrocketing costs. We should remain in D.C. at work.”

Sen. Rand Paul, R-Ky., who has publicly been advocating starting the idea of starting with a full Obamacare repeal publicly for two weeks, quickly retweeted the president and added his support.

Sasse has kept a low profile throughout the negotiations on health care, refusing to comment or publicly engage on the bill.

The idea was considered by Republican leaders at the beginning of this year when Trump took office but it was quickly dropped when they realized it would be too politically difficult to replace Obamacare outside the reconciliation process where the Senate would need the support of Democrats to pass a replacement.

Senate Republicans continue to discuss a way forward in the health care bill, considering changes to appear both moderates and conservatives to get the support of 50 of 52 Republicans.

[NBC News]

 

Trump team halts rules meant to protect students from predatory for-profit colleges

The Trump administration is suspending two key rules from the Obama administration that were intended to protect students from predatory for-profit colleges, saying it will soon start the process to write its own regulations.

The move made Wednesday by Education Secretary Betsy DeVos was a victory for Republican lawmakers and for-profit colleges that had lobbied against the rules. Critics denounced it, accusing the administration of essentially selling out students to help for-profit colleges stay in business.

The Education Department released a statement saying that it was going to create new committees to rewrite rules covering borrower defense to repaying, or BDR, and gainful employment. BDR relieves students of all federal loans if a school used illegal or deceptive tactics to persuade students to borrow money to attend. Gainful employment requires that action be taken — including possible expulsion from the federal student aid program — against vocational programs whose graduates leave with heavy student loan debt. Ninety-eight percent of the programs that officials found to have failed to meet those standards are offered by for-profit colleges.

Parts of the gainful employment rule are already in effect. BDR was set to become effective July 1 but will now be postponed. The Education Department said that while new rules are drawn up, it will process applications under the current borrower defense rules.

A program is considered to lead to “gainful employment” if the annual loan payment of a typical graduate does not exceed 20% of their discretionary income or 8% of their total earnings. Exceeding those debt-to-earnings rates means possible expulsion from the federal student aid program.

DeVos criticized the regulations that were approved by the Obama administration, saying that they are unfair to students and schools and that they leave taxpayers with a big bill.

“Fraud, especially fraud committed by a school, is simply unacceptable,” she said in her department’s statement. “Unfortunately, last year’s rule-making effort missed an opportunity to get it right. The result is a muddled process that’s unfair to students and schools, and puts taxpayers on the hook for significant costs. It’s time to take a step back and make sure these rules achieve their purpose: helping harmed students. It’s time for a regulatory reset. It is the department’s aim, and this administration’s commitment, to protect students from predatory practices while also providing clear, fair and balanced rules for colleges and universities to follow.”

The American Federation of Teachers pushed back against the decision.

“The Trump administration’s actions today show that the White House stands with predatory for-profit schools, not the students they rip off,” it said in a statement. “About the only thing worse than ripping off students with worthless degrees from for-profit colleges is denying them help to relieve their substantial debt, and allowing the schools to continue to prey on students. Given that for-profit colleges were big donors to Trump and other Republican candidates, one wonders whether this is simply a new pay-to-play scheme at the expense of our students, including our veterans, who are much helped by the rules Education Secretary Betsy DeVos wants to eliminate.”

Not everyone in higher education opposed the administration’s move, however. The Chronicle of Higher Education reported that the United Negro College Fund and the National Assn. for Equal Opportunity in Higher Education — which represent historically black colleges and universities, or HBCUs — sent a letter to DeVos this week urging her to put a hold on the implementation of the regulations and reconsider them.

“We remain concerned about the sweeping scope of the regulation and vague standards for determining ‘misrepresentation’ that could unfairly leave HBCUs and PBIs liable for frivolous claims, unwarranted fines, and unfounded penalties,” they said in the letter. “Such provisions could result in significant costs that would divert precious resources better spent on serving the needs of students.”

The nonprofit consumer advocacy group Public Citizen and the Project on Predatory Student Lending smacked DeVos’ move, saying in a statement that she had “put the profit margins of for-profit colleges ahead of the interests of students and their families” in “a craven attempt to avoid the agency’s legal obligation” to enforce the rules. The statement cited a part of the Obama-era rules that included a ban on the use of forced arbitration clauses in many student enrollment contracts:

“These clauses require students to submit any dispute that might later arise between the students and the institution to binding arbitration, a private process with little right to appeal, instead of a court of law. The rules also provide new and long-needed protections for students asserting defenses against repayment of their federal loans based on fraud or other misconduct by the students’ schools.”

[The Los Angeles Times]

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