President Donald Trump has long positioned himself as “tough on crime”—but, as a new Public Citizen report revealed Wednesday, that stance doesn’t extend to “lawbreaking corporations.”
Over the first two years of Trump’s presidency, enforcement activity at the nation’s top three consumer protection agencies that resulted in fines of at least $5,000 plummeted 37 percent from the last two years under former President Barack Obama, according to Consumer Carnage (pdf), the watchdog group’s new report.
“Trump, who once asserted that he was ‘not going to let Wall Street get away with murder,’ now is allowing industry after industry to get away with just about anything,” said Alan Zibel, the report’s lead author and research director for Public Citizen’s Corporate Presidency Project.
“Trump’s appointees’ apparent belief that enforcement of consumer protection laws should be a last resort,” Zibel noted, “represents a dramatic about-face from Trump’s claim of populism during his campaign.”
Once Trump took over the CFPB, enforcement activity against lawbreaking corporations sank by more than 50 percent.
In one recent case, the CFPB fined a lender accused of swindling veterans out of their benefits just *one dollar* after the lender claimed he couldn't pay.
— Public Citizen (@Public_Citizen) March 13, 2019
The watchdog’s analysis show that the drop at the Consumer Financial Protection Bureau (CFPB) “has been especially egregious,” particularly under the reign of Mick Mulvaney, who is now acting White House chief of staff and head of the Office of Management and Budget (OMB). Kathy Kraninger, who previously served under Mulvaney at OMB, now runs the CFPB, and has continued Mulvaney’s efforts to gut the agency.
The CFPB, as the report highlights, “completed 11 enforcement actions of $5,000 or more against corporations in 2018, down 54 percent from 24 in 2017, when the CFPB was still run by an Obama appointee.” That man, Richard Cordray, resigned as CFPB director in November of 2017.
The Consumer Product Safety Commission (CPSC), meanwhile, completed seven major enforcement actions against corporations during 2017 and 2018, compared with 13 during Obama’s final two years. At the Federal Trade Commission (FTC), enforcement actions fell by 31 percent, from 58 cases under Obama to just 40 under Trump.
“Under this president, federal agencies have slashed fines, declined to bring cases against corporate wrongdoers, and gutted enforcement programs,” said Public Citizen president Robert Weissman, summarizing the current conditions. “The result is a government that is eager to throw consumers under the bus.”
Weissman specifically laid blame on the individuals Trump has charged with overseeing the three top federal consumer protection agencies. As he put it, “Members of the Trump administration have made abundantly clear they perceive their function as serving and assisting corporations instead of holding them accountable for lawbreaking.”
While Public Citizen focused on enforcement actions across three agencies that garnered penalties of $5,000 or more—using the Violation Tracker database compiled by the Corporate Research Project of Good Jobs First—a report (pdf) put out earlier this week by the Consumer Federation of America (CFA) offered similar conclusions about overall enforcement at the CFPB.
Under Mulvaney and Kraninger’s leadership, “enforcement activity at the CFPB has declined to levels that are either nonexistent or significantly below that of the prior administration, even in the areas where consumer complaint activity is the highest,” states CFA’s report, entitled Dormant. “The number of public enforcement cases announced in 2018 declined by 80 percent from the Bureau’s peak productivity in 2015.”
Pulling out the key numbers from CFA’s analysis, USA Today reported, “Overall, Cordray brought an average of 0.72 overall cases per week, compared with 0.2 cases for Mulvaney and 0.38 cases for Kraninger.”
USA Today also compared enforcement rates for particular areas:
- Credit reporting: 0.09 cases per week under Cordray vs. 0.04 cases under Mulvaney;
- Debt collection: 0.07 cases per week under Cordray vs. 0.02 under Mulvaney;
- Mortgage lending: 0.22 cases per week under Cordray vs. 0.04 under Mulvaney;
- Student loans: 0.05 cases per week under Cordray vs. 0.00 under Mulvaney.
Christopher Peterson, CFA’s director of financial services and author of Dormant, decried the steep declines in enforcement rates under Trump in a statement on Monday.
“Consumers have a right to expect that the federal government will enforce our consumer protection laws,” he concluded. “It is simply unacceptable for a consumer protection agency to turn its back on consumers that have been harmed by their financial institution’s deceit.”