INDIANAPOLIS – We all want financial services that propel us toward our goals – a home, an education, a small business, a dignified retirement. But in today’s increasingly complex financial marketplaces, some companies exploit consumers, often denying their victims the opportunity to reach those goals, or even sending them backwards.

Abuse and deception in financial marketplaces affects whole communities, not just individuals, and it should not take an advanced degree in finance to avoid the pitfalls, so it makes sense for consumers to have a watchdog. And they did, until recently.

From 2011-2017, Hoosiers could depend on the Consumer Financial Protection Bureau (CFPB). Established in the wake of our still-recent financial collapse, the CFPB went after the banks, student loan servicers, debt collectors and others who took advantage of consumers. It recovered about $12 billion for consumers in principal reductions, cancelled debts or monetary compensation against unfair or deceptive lenders.

Among these was Wells Fargo, which secretly opened deposit and credit card accounts, racking up fees and other charges. Through rules, guidance and enforcement, the CFPB aimed to end discriminatory practices in auto lending and make prepaid card fees more transparent. It developed a rule to limit arbitration clauses in financial contracts so that consumers could band together in class-action lawsuits (later repealed by Congress). It crafted a landmark rule to curb the debt treadmill of payday loans. It produced educational materials so consumers would know their rights when debt collectors call (and call and call) and had tools to help them balance their budgets.

Then in November of 2017, a leadership change transformed everything. Now, with temporary acting director Mick Mulvaney at the helm, it feels like the watchdog has been greeting thieves at the door with an enthusiastic tail-wagging. Under Mulvaney’s part-time supervision (he also heads the Office of Management and Budget), the CFPB quickly dropped pending lawsuits against predatory lenders attempting to use tribal affiliation to charge upwards of 900% APR on small loans.

It is threatening to hide the complaint database, which more than 16,000 Hoosiers have used to seek redress and which the Institute for Working Families and others have used for research. It actually joined two payday lender trade associations, representatives of the industry it is supposed to be overseeing, in calling a halt to the payday rule — which was honed through five years of research and public input, and would have ended a significant portion of the harms caused by these extremely high-cost loans. And now President Trump has appointed Kathy Kraninger, an associate director under Mulvaney at OMB, to be the permanent director.

All Hoosiers, regardless of their income or background, deserve access to a financial marketplace that is fair, safe and transparent. To get there, we need a CFPB that will guard consumers effectively, not one that rolls over and plays dead at the sight of financial abuses. We have had such an agency in our corner once before and we can have it again. Senators Donnelly and Young should thoroughly vet Kraninger and only put the stamp of approval on her if they are confident she will fight for working families. Anything less is unacceptable.  

Macey, Ph.D, is a policy analyst for the Indiana Institute for Working Families and the Indiana Community Action Association.