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Will Donald Trump Gut the Consumer Financial Protection Bureau by Firing its Director?
A recent blog written by Paul Bland of Public Justice raises some troubling concerns regarding the future direction of the Consumer Financial Protection Bureau (CFPB). Bland’s comments appeared on the Daily Kos website on Dec. 28.
What is the CFPB?
Established after the economic crash of the late 2000s, the CFPB was created as part of the Dodd-Frank Act, which placed limits on a banking system that was viewed as being largely responsible for our country’s financial disaster. One of the main roles of the Bureau is to protect consumers from fraudulent banking and lending practices.
According to Bland, the CFPB has recovered nearly $12 billion on behalf of consumers who were cheated by those actions. For example, the Bureau recently fined Wells Fargo $100 million after it was revealed the bank opened approximately 2 million bank accounts without consumers’ consent.
What Will Trump Do?
Bland fears that president-elect Trump will cave into the big banks’ demands and fire CFPB director Rich Cordray. He compares the potential move to Richard Nixon firing Independent Special Prosecutor Archibald Cox as the Watergate scandal unfolded. If Cordray is fired, Bland writes, Trump will likely replace him with someone who “will stop fighting to keep banks honest.”
Such a move, Bland believes, will be motivated by big banks’ desire to strengthen the practice of forced arbitration, which is typically a clause buried deep inside sales contracts that severely limits the rights of consumers. If you have ever purchased a smartphone or leased a car, you’ve probably agreed to this clause without even knowing it. As a result, you are basically surrendering your right to file a lawsuit if you have any type of dispute with the service provider. Instead, your dispute will be heard by a private arbitrator – one who will likely side with the provider.
We urge you to read Bland’s blog in full so that you can get a picture of just how damaging a firing of Cordray would be to consumer rights. If you have any questions regarding forced arbitration, or you feel your rights have been violated by your bank or any other large corporation, click here to contact us online or call us at 866-723-1890.