Congress voted this week to undo virtually all the protections put in place since the Great Recession to guard against future economic crashes and bailouts and hand the reins of our economy back over to big banks and shady payday lenders. The legislation in question, the so-called CHOICE Act, passed the U.S. House of Representatives by a vote of 188-233.
Congress’s vote suggests that they are more committed to representing the lobbyists who live in the D.C. swamp than the families and working people who live in the areas that they represent. There is simply no good reason why someone who is supposed to stand for people would support legislation that explicitly protects payday lenders, destroys the government watchdog that caught scam artists like Wells Fargo and allows banks to go back to doing the same kinds of risky deals that forced us to rescue them with our money.
The bill that Congress voted for destroys the Consumer Financial Protection Bureau’s ability to do its job. If this became law, the CFPB would no longer be able to effectively enforce laws that stop mortgage companies, debt collectors, student loan servicers or other financial services companies from swindling consumers. The CFPB’s Consumer Complaint Database would also hide the names of companies consumers are experiencing problems with – removing an incentive for treating customers fairly and a valuable tool for tracking companies with systemic abuses. Since the agency’s inception, its consumer complaint system has helped over 1,200 people from our state with such concerns.
The CFPB would also be barred from regulating payday lenders, which are designed to trap borrowers in a cycle of debt. Montanans should be particularly concerned with this congressional vote because verbiage snuck into this bill that could allow a broad range of predatory actors, such as payday lenders, debt collectors, and others, to override our current state laws.
Additionally, this bill would:
• Take away the CFPB’s core authority, to stop companies from pushing unfair, deceptive, or abusive products. This is the authority that has allowed the CFPB to stop, for example, debt collectors from illegally threatening consumers or credit card companies from ripping off customers with hidden fees.
• Create massive loopholes in the rules put in place to discourage the kind of unaffordable mortgages that were at the heart of the foreclosure crisis.
• Exacerbate “Too Big To Fail” by stripping agencies of the power to wind down megabanks without bailouts or inflicting widespread harm on the economy.
Contact me at OrganizingMT@gmail.com for more information.
Katie Sutton
Montana Organizing Project