Sunday, August 12, 2018

I Know! Let's Allow Businesses to Take Advantage of Consumers!

What a fun game this is. The country elects Republicans who oppose government involvement in our lives, except for our private parts, favors businesses over people, and makes it easier for businesses to take advantage of us when we try to fight back. The game then continues when we elect Democrats to fix all of that.

The Consumer Financial Protection Bureau, which was created in the aftermath of the Great Economic Blowup of 2008, was supposed to monitor companies that wanted to take advantage of consumers and separate us from our money, which, if you want to be technical, is what every company wants to do. The issue is that most companies sell a product that, when used correctly, helps us with a task, meets a financial, social or emotional need, or tastes pretty darn good. Those that sell products that just separate us from our money, make fraudulent claims or prey on unsuspecting consumers with questionable claims or practices need to be thrown out of the market place.

Until last year, the Bureau, which was still run by Obama appointees, was responsible for reclaiming billions of dollars from companies that did bad things, including credit card companies, pay-day lenders, regular banks, student loan purveyors, and other swamp creatures.

Now it's not run by anyone remotely interested in overseeing consumer protection. In fact, many of the original rules have been neutered or rescinded, and the CFB is run by Mick Mulvaney, also the Director of the Office of Management and Budget. Guess which job demands more of his time?

The results have been significant. The CFB is now looking to suspend examinations of lenders for violations of the Military Lending Act, which is supposed to protect military families from fraud and stuff.

And Betsy DeVos now wants to scrap rules that forced for-profit colleges to substantiate their claims about being able to get their students jobs that pay money and stuff. You remember the for-profit colleges like Trump University an Corinthian College, right? They were forced out of business because they took money and didn't give people the skills and knowledge to get jobs.
Now, I know that not-for-profit institutions of higher education couldn't guarantee anyone a job, but that's because their job is to...wait for it...educate their students, which most colleges do pretty well. But if your reason for existing is to get someone a job, then you'd better do quite well at that.

And this is just the beginning. Consumers and employees are already at a disadvantage because we have to agree to arbitration if we have a dispute with a company rather than being able to file class-action suits. Arbitration is stacked in favor of corporations simply because they run the system. It will likely not surprise you to know that this spring, the Supreme Court said that arbitration was constitutional because it would avoid costly and time-consuming litigation. As if costly and time-consuming were both so bad that they simply can not hold up under judicial or legislative scrutiny.

There's also the repeal of the Fiduciary Rule, which said that financial companies had to put the interests of consumers ahead of commissions and sales goals. Imagine a company that fights against putting consumers first. Can you say, Wells Fargo?

As for pay-day lending, why that industry even exists is a tragedy. Workers should not have to get a loan that uses a paycheck as collateral. Employers need to pay their employees a livable wage and not make it necessary for them to saddle themselves with loans that have exorbitant interest rates. It's outrageous that the alternatives in this list do not include demanding a wage that allows someone to live a decent life, or to be able to go to a regular bank and open a no-fee savings or checking account.

It is certainly incumbent upon all consumers to educate themselves and to spend their money wisely. But when unscrupulous businesses can continue to operate in a market economy without government oversight, that's a recipe for disaster.

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