Voters Support Holding Wall Street Accountable

(This article first appeared in the March-April 2018 issue of the American Postal Worker magazine)  

U.S. voters strongly support holding Wall Street accountable, according to a 2017 poll by Americans for Financial Reform (AFR). Majorities of Democrats, Republicans, and Independents favor more regulation of finance, not less.

In addition, 74 percent of voters support the work of the Consumer Financial Protection Bureau (CFPB). Created as part of the 2010 Dodd-Frank Act, in the aftermath of the 2008 financial collapse, the CFPB has worked to reign in high-interest payday lending and debt collection. The CFPB has awarded nearly $500 million to consumers who were victims of scams involving mortgages, student loans, and credit cards.

“The American public, across lines of party, want Congress and the administration to protect the progress made in Dodd-Frank, and do more – not less – so the financial system works to the benefit of ordinary Americans,” said Lisa Donner, AFR’s executive director.

Hobbling the Consumer Financial Protection Bureau

However, two alarming moves threaten to weaken the power of the CFPB. Under its new director, Mick Mulvaney, the CFPB appears to have altered its mission. The bureau’s official description now includes “regularly identifying and addressing outdated, unnecessary, or unduly burdensome regulations.” The reason for creating the bureau, as supported by the public, is to regulate more, not less.

Mulvaney also put a stop to collection of consumer data, which is needed for monitoring for unlawful activity. Senator Elizabeth Warren (D-MA), who helped create the CFPB, has been particularly critical. “Director Mulvaney’s actions appear to be aimed at hobbling the agency,” she said.

The bureau is also considering a reversal or watering down of current rules on prepaid cards, debit accounts, mortgage disclosure, and payday lending.

‘Fintech’ Legislation a Back Door for Payday Lending

Supporters of a Senate bill, Protecting Consumers’ Access to Credit Act of 2017, say they aim to open up lending opportunities to consumers who desperately need them – but many consumer rights advocates say it is just payday lending in disguise.

Senator Mark Warner (D-VA) introduced the bill that would allow “fintech” – financial technology – companies to get in on the action of payday loans. Under such legislation, fintech companies, which provide financial services through a mobile app or website, could partner with a national bank and get around state caps on interest rates. New York state, for example, essentially prohibits payday lending by capping interest rates at 25 percent. The “rent-a-bank” scheme would create a loophole, as banks are subject only to the rules of their home state, not those of the borrower.

Opening up the fintech market to lending could result in a nearly half-trillion dollar market within a few years, according to a study by Morgan Stanley. But “such a move could severely undermine state oversight and state laws that protect consumers and small business owners from abusive financial products and practices,” stated a letter signed by more than 250 organizations.

Postal Banking: The Time is Now

“The American people demand accountability from Wall Street and access to financial services that serve the people,” said President Dimondstein. “We must push even harder for affordable financial services at the post office. It will promote an economy that serves the people, not Wall Street, and it will strengthen and protect our public Postal Service.”