Trump and Dodd-Frank – What You Don’t Know

In 2009, I began working for several financial sites –  mostly keeping up with their blogs and some white papers. It wasn’t too long before the 2009 CARD Act was signed into law and within a year after that, so was Dodd-Frank Act.  I had to immerse myself in a crash course as to what these laws meant for consumers. Both were straight out of the Obama Administration.

It wouldn’t take long to realize the Consumer Financial Protection Bureau, which was founded under Dodd-Frank, was a different regulatory agency. Under the guidance of Director Richard Cordray, many Americans saw there were government agencies that really had no ulterior motives. Let me say this: most of those who drive the financial sector machine in this country are reliable, honest and truly work to do good each day. It’s the ones who don’t, the ones who can’t see past the dollar signs, who cause so many problems.

This week, less than a month into his term, President Trump has effectively unraveled every protection Americans had against everythingcapture-20170215-182226 from “too big to fail” banks (JP Morgan Chase, Citigroup, Wells Fargo and Bank of America), predatory college loans, insane interest rates on mortgages, and much more. By repealing Dodd-Frank, he’s also eliminating all of those financial protections the average American relies on. By the way, it’s important to note, this was the solution to ensure we would never see another mortgage meltdown that we saw in 2008 with the record number of foreclosures for millions of American families.

Here’s what you might not know:

February 5, when asked by a reporter what his intentions were, President Trump said “We expect to be cutting a lot out of Dodd-Frank.”  He said this during a White House meeting with big business leaders and bank presidents, including JPMorgan Chase CEO Jamie Dimon. That’s a problem.

It’s interesting that the president would say something like this during a meeting with Dimon and his counterparts, mostly because of the headache CFPB has been for many of these CEOs – and most certainly JPMorgan’s leader. Here are just a few of the clashes JPMorgan Chase has had with CFPB.

CFPB Orders Chase and JPMorgan Chase to Pay $309 Million Refund for Illegal Credit Card Practices

SEP 19, 2013

CFPB Takes Action Against Wells Fargo and JPMorgan Chase for Illegal Mortgage Kickbacks

JAN 22, 2015

CFPB, 47 States and D.C. Take Action Against JPMorgan Chase for Selling Bad Credit Card Debt and Robo-Signing Court Documents

JUL 08, 2015

CFPB isn’t reserved just for the banks. It has also focused on predatory lending on everything from payday loans to mortgages to aggressive collection actions:

CFPB Takes Action Against Two Law Firms for Misrepresenting Attorney Involvement to Collect on Medical Debts This one ordered medical debt collection law firms to refund $577,135 to consumers.

JAN 09, 2017

CFPB Takes Action Against NewDay Financial for Deceptive Mortgage Advertising and Kickbacks

FEB 10, 2015

CFPB Takes Action Against ACE Cash Express for Pushing Payday Borrowers Into Cycle of Debt

JUL 10, 2014

This agency has sought to protect consumers on all things financial, including student loans and the aggressive manner in which collection agencies collect debts. Imagine your parents filing for social security and being told they couldn’t until YOUR student loans from thirty years ago were paid back. That’s what this agency does – takes these kinds of disturbing companies down. Well,  maybe not so much now.

The reality is Trump had an opportunity to fix what wasn’t working with Dodd-Frank. In all honestly, the accounting and different regulations are confusing. I’m sure there are analysts who can dissect the law far better than I could begin to understand. I’ll leave that to them. In terms of the every day family with typical challenges and not knowing who to trust in the financial sector, this is a real disappointment – even if no one realizes it right away. Mark my words – you’ll soon see the next time you apply for a college loan or a mortgage and feel like a loan officer is playing fast and loose on your unfamiliarity of contracts or if an unethical debt collector begins seeking you out on social media.

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TX Congressman Jeb Hensarling Needs to Go – NOW

It’s no secret the way politics really work in this country. There are those tell-tale signs that show even the most removed soul where the priorities are. Right or wrong, it’s what drives this country we call home. In recent years, though, there have been decisions, actions and changes that have left many simply speechless. The latest move, courtesy of a Texas Republican, has even this die-hard Republican furious. It’s time for Jeb Hensarling to rethink his career options.

New Banking Laws

When the Obama Administration announced it would be taking steps to rein in the nation’s biggest banks, many were skeptical, but hopeful that any changes would finally shut those arrogant and narcissistic personalities down. Those like Jamie Dimon come to mind. He’s the outspoken, controversial and egotistical thsoul that runs JPMorgan Chase. Anyone who’s read anything I’ve written in the pat few years knows just how deep my distaste for this man runs. He is absolutely infuriating – but he’s just one of many.

Soon, Obama signed into law new financial rules that even Dimon was forced to play by. The laws were then – and are still now – controversial. Some I agree with, some I don’t, but there’s no denying the decision to put into place a consumer watchdog group will likely be the one good thing Obama will be remembered for (and y’all know how I feel about the Obama Administration). Soon, the Republicans cried foul and were adamantly opposed to the laws and the new Consumer Financial Protection Bureau. Obama stood his ground though and while the Dodd Frank Financial Laws fall significantly short of serving their purpose, the 2010 CARD Act, which provides for the founding of CFPB, was a home run.

Congress refused to acknowledge CFPB Director Richard Cordray, even after Obama appointed him. Days following the swearing in by Obama, a federal appeals court ruled that the process used to swear him in was constitutionally invalid. This means Cordray has been going about the business of running CFPB without the legalities (albeit suddenly defined legalities) that make it proper. Now, Hensarling has latched onto that like a starving vegetarian who’s just discovered rib-eye steak.

This week, as Cordray prepared to testify in front of Congress about the state of his agency, Hensarling piped up and complained, “The court’s unanimous ruling makes it clear that there is no legally-appointed director of the CFPB at this time.” He went further and said, “By law, the committee can receive this testimony only from a director who is appointed in accordance with the Constitution and the Dodd-Frank Act, which created the bureau.”

Meanwhile, had Cordray been given the opportunity, he would have testified on a number of events that his agency – and his agency alone – has put into place to protect you and me and every other American consumer.

Among the accomplishments in the past six months:

  • CFPB has secured $425 million in relief for more than 6 million consumers (and this the one agency that actually refunds consumers instead of calling them “fines” and adding them to government coffers)
  • CFPB is successfully addressing more than 130,000 complaints on anything from credit card billing practices and banks to overpriced payday loans that often have interest rates of 300% annually
  • CFPB also just announced new laws on how consumers will be treated when it comes to buying a house. Several of the nation’s biggest banks and insurance companies are gouging homeowners on private mortgage insurance (PMI). The banks are taking financial kickbacks and CFPB is the one kicking back – and putting a halt to it. There are already lawsuits being filed – and federal judges are allowing those homeowners to sue. It’s all because of Cordray and CFPB.

So why would Congress be opposed to an agency that protects its members’ constituents? I’ve asked that question a million times. It all comes down to the same thing:

The new financial laws prevent bankers and politicians from padding their pockets. The new laws mean oversight and that means the banks must follow by ethical and legal rules. They don’t like it.

Here are just a few of the ridiculous actions/comments Jeb Hensarling’s made in recent days:

The committee intends to continue to conduct rigorous oversight of the CFPB’s activities, and will expect the CFPB’s cooperation in those efforts, including making other employees available to testify at committee hearings and responding fully to committee requests for documents and information.”

(It’s clear he wants complete control of CFPB so that he can put a lid on it. He has no interest in hearing from Cordray, but Hensarling wants CFPB employees to appear when he commands.)

Hensarling sent a letter to the lawyers for CFPB and said Obama’s appointment was invalid because Senate was in recess. He says that the laws dictate the only way he and his fellow politicians can hear testimony is if it’s “from a director who is appointed in accordance with the Constitution.”

(Cordray has testified numerous times in the past – and no one complained.)

Earlier this week, he sent Cordray a letter as well, in which he stated:

Absent contrary guidance from the United States Supreme Court, you do not meet the statutory requirements of a validly-serving director of the CFPB, and cannot be recognized as such,”

Finally, remember that Senator Elizabeth Warren also caught hell from Republicans and has since taken a step back until it’s all hashed out. That’s a shame because she came with guns blazing, ready to work alongside Dems and Pubs – and CFPB. Instead, the Senate again refused to confirm her.

At a minimum, Hensarling needs to be stripped of his title as chairman of the House Financial Services Committee. It’s clear his priorities are not in line with the same folks who elected him into office. He has ulterior motives and appears to be doing very little to hide them.