The Consumer Financial Protection Bureau’s fate hangs in the balance, and with it the extent of the government’s oversight of Americans’ savings and $18 trillion in household debt.
Consumer advocates are already sounding alarms.
“This climate is going to be ripe for an uptake in fraudulent activities,” said Lara Benson, an attorney at the National Community Reinvestment Coalition, a fair-lending advocacy group.
The Trump administration has moved quickly to shut down work at the consumer protection bureau. The nearly 14-year-old arm of the Federal Reserve, created in response to the 2008-09 financial crisis, has long been targeted by conservatives and the banking industry that accuse it of being unfair, excessive and even unconstitutional.
Courts have so far halted White House efforts to slash the CFPB’s workforce to the bone, with a judge last week asking a Justice Department lawyer whether “making sure consumers are protected from abusive practices” is “inconsistent with policy priorities of this administration.”
“I don’t know the answer to that question,” the attorney responded.
There are especially high risks among the many proliferating services offered outside the traditional banking system, Benson and other advocates warn. The CFPB is the only federal regulator of so-called nonbank lenders like mobile payments apps including Zelle, Apple Pay, Stripe, CashApp and more.
Last week, the agency dropped a case against the three big banks that operate Zelle, accusing them of mishandling fraud complaints that led to users of the payment app losing more than $870 million.
“If they’re not looking out for you and making sure that your credit cards and credit report and bank account are safe, then you’re really going to need to do that yourself,” said Lauren Saunders, managing attorney at the nonprofit National Consumer Law Center, which recently joined a legal effort challenging the agency’s shuttering.
Here’s what advocates say you can do in the meantime.
Review your charges regularly
Routinely scanning your transactions and bank statements is simply good financial hygiene, experts say, but it’s more important to get in that habit now.
“It’s about making sure there’s no surprise activities going on,” said Adam Rust, director of financial services at the Consumer Federation of America, an advocacy group.
Budgeting apps like EveryDollar or YNAB aggregate charges to make tracking your spending easier, he said. Rust also suggested hiring a financial planner for those who can afford it, or asking your local bank branch or community action agency about free or low-cost advisory services.
Experts also said reviewing your charges should include reviewing your settings. For example, with Republicans set to repeal the CFPB’s $5 cap on overdraft charges, advocates say now might be a good time to change any settings that permit overdrafts for a fee. Check with your bank about the best way to adjust your options. With Chase, for example, customers must sign into their accounts and turn off “debit card coverage.”
“Debit card banks tout it as overdraft protection,” said Saunders. “Most people would rather have that [charge] denied than pay a $35 fee.”
Beef up your account alerts
Consumers can stay vigilant between account check-ins by taking advantage of bank alerts, experts advised. Most financial institutions allow customers to sign up for email or text messages about credit and checking transactions, said Teresa Murray, director of the consumer watchdog program at U.S. Public Interest Research Group, an advocacy network.
“You can set the parameters for any transaction above [a specific] amount, or any transaction out of state,” Murray added.
Last year, the FTC tallied more than $10 billion in victim losses due to identity theft. While services such as LifeLock offer aggressive identity protection for a monthly or annual fee, Murray also noted that the three major credit bureaus allow borrowers to freeze their credit files for free, which can prevent new accounts from being opened up in your name.
Exercise caution with payment apps
With so many digital payment options, some experts warn consumers’ finances are more vulnerable than ever. Rust said “using fewer services” is an easy way to limit your exposure and suggested “being especially careful” about the nonbank providers of which the CFPB has been the sole federal regulator.
In the last months under then-CFPB Director Rohit Chopra, the agency intensified its scrutiny of tech companies that had expanded into digital payments, in part because those services were not subject to traditional banking requirements such as FDIC insurance.
Given the current administration’s approach, it might make sense to move any funds received through payment apps to an FDIC-insured checking account, said Chuck Bell, program director for advocacy at Consumer Reports, rather than leave them sitting after transactions. He also advised making sure any fund requests come from people already in your contacts.
“Sometimes consumers are being hoodwinked into transferring all the money out of their account because somebody calls up and says, ‘Your phone bill is due,’ or ‘I’m calling from the bank and I have to help you secure your funds,’” he said.
Shop around and read the fine print
Several advocates warned there are some potentially unfair practices — like lenders setting home and auto loan interest rates set by algorithms that use biased data — that customers simply won’t be able to catch on their own, particularly if the CFPB is hobbled. That’s why it’s important to research your options before signing, said Bell.
“As consumers, we’re on the receiving end of a lot of marketing materials for, say, credit cards or bank accounts,” he said. “We tend to adopt those products rather than doing an extensive analysis of, what are my options, which banks charge the lowest fees, which ones have the best rates for credit cards.”
Bell suggested websites like Bankrate and NerdWallet to compare financial products from credit cards to student loans and home equity lines. He also warned against making big money decisions in isolation.
“Asking other folks who have knowledge about financing is really important,” he said. “Two or three opinions is better than one.”
Take notes, and complain — to everyone
Soliciting consumer complaints was previously one of the CFPB’s key functions, helping to guide its enforcement and investigative actions. But some advocates worry moves at the agency have already discouraged submissions, such as the error message that temporarily appeared on its homepage in recent weeks.
“We don’t know if they’re going to shut down that complaint system altogether,” said Saunders. (Spokespeople for the White House and the CFPB didn’t respond to requests for comment.) There are still plenty of other entities to complain to, she said, including media outlets, other consumer-facing agencies like the Federal Trade Commission, and local law enforcement.
State-level authorities may have to step into any void left by a weakened CFPB, advocates say. Murray advised consumers to use her organization’s online tool for submitting complaints to their state attorney general offices, but added that any complaint should start with the company itself.
Ask questions until the service provider has made you feel comfortable, she said, and take notes so you can refer to prior conversations and transactions.
“You’re more likely to get good results,” she said. “It’s like, ‘Oh gosh, this person has their act together.’”
Lastly, many organizations offer free or affordable legal services for consumer issues, Benson said, including Legal Aid and other advocacy groups like hers.
“Take advantage of those resources,” she said. “If you believe you’ve been a victim, even though we’re dealing with these issues in the CFPB, you do still have power.”
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