The Star-Ledger

5 Things That Have Changed For Consumers Since Trump Became President

The Star-Ledger — May 15, 2018

By Karin Price Mueller | NJ Advance Media for NJ.com

Every president brings change. Laws change. Regulations change. The direction of the country changes.

That's what happens.

But drop your political lens for a moment.

Think consumer protection. What happens if you've been wronged by a business? What if laws and regulations don't protect you and your wallet?

That's what consumer advocates say is happening under the Trump administration. They're alarmed by a cavalcade of changes they say leave the little guy behind while Wall Street and big corporations gain advantage.

"It's a disastrous administration for consumer protection," said Sally Greenberg, executive director of the nonprofit National Consumers League. "It's completely blind to the need for strong rules and strong consumer protections."

Here are five changes consumer advocates say are vital for consumers to know.

1. Consumer Financial Protection Bureau

Let's start with the Consumer Financial Protection Bureau (CFPB), which was created in the wake of the financial crisis of 2007 and 2008. It's mission was to protect consumers against deceptive, abusive and unfair practices by financial companies.

"In its first several years, it did a great job of focusing on problem mortgages, payday lenders and fine print clauses," said Lauren Saunders, associate director of the nonprofit National Consumer Law Center (NCLC).

She said we've had an "about face" since the president's nominees have taken over.

"CFPB enforcement activity is down 80 percent from its peak, and even when it brings enforcement cases, consumers get little or no relief from the scams they've been subject to," Saunders said.

Ed Mierzwinski of the nonprofit U.S. Public Interest Research Group said under Trump's acting director Mick Mulvaney, and today under new director Kathy Kraninger, the CFPB has "signaled to business that breaking the law will result in small parking tickets, not punishment."

Further, he said, Kraninger has signaled that consumer education — not enforcement —will be the primary CFPB activity going forward.

"This is a climate where companies will push more unfair and deceptive practices with little downside risk," Mierzwinski said.

Phyllis Salowe-Kaye, executive director of New Jersey Citizen Action, said consumers in our state may benefit from consumer protections beyond federal laws and regulations.

"We have a progressive governor who is attempting to mitigate as many of the anti-consumer protection policies that have taken place in this administration as possible," Salowe-Kaye said. "[Gov. Murphy] has appointed a director of Consumer Affairs who actually cares about consumers and he has also made a commitment to establish a state CFPB."

2. Product safety

There has been a general trend toward deregulation and lifting rules on industry, said Greenberg of the National Consumers League.

She said there's a mistaken notion that rules and regulations hinder industry, and she argues that consumer protections actually improve industry's reputation with consumers and can be profitable.

For example, she said, back in the 1990s, there was no standard for vehicle stability and many SUVs would flip over at high speeds. Greenberg advocated for stability tests — opposed by the auto industry — and the tests were eventually required by legislation.

"And now we have a brilliant thing called electronic stability control," she said. "Industry will create technology but they need to be required to do so. They won't necessarily do it on their own."

A second auto example is backup, or rear, cameras. There was a time when car companies were against mandatory cameras, Greenberg said, despite a series of child deaths when drivers of large vehicles backed up and accidentally ran them over.

"The industry resisted, saying 'It's not our fault if you run over your kids,'" Greenberg said. "Now one of the first things the auto industry advertises for safety is the rear camera."

But today, government isn't moving towards regulation that can save lives and prevent injuries, Greenberg said.

Take table saws, for example. Greenberg said according to data from a federal injury database, 10 people a day have their fingers severed by the saws. The Consumer Product Safety Commission (CPSC) voted 3-2 to move forward with a mandatory standard for table saws, including a sensor that prevents amputations because it uses electrical impulses to detect the difference between wood and a human finger, Greenberg said.

But the CSPC acting chair, Ann Marie Buerkle, has refused to implement the standard despite the vote, Greenberg said.

"Under a different administration, we would probably have a mandatory standard," Greenberg said.

3. Protections for student borrowers

Consumer advocates say the Department of Education (DoE) under secretary Betsy DeVos has eliminated many protections for students.

"The Department of Education has taken a terrible wrong turn in siding with predatory for-profit colleges and rolling back protections for consumers who have been swindled into thousands of dollars of debt for worthless educations," Saunders said.

The administration has also revoked laws that penalize student loan lenders and servicers for predatory acts.

Oversight and transparency in this area has all but been eliminated, Salowe-Kaye said.

"This will clearly cause more defaults on student loans and will eventually impair the credit of the students, parents and even grandparents who have repayment responsibility," she said, noting the DoE has preempted the state's ability to get involved in unfair or deceptive acts or practices.

But, she said, the New Jersey attorney general has led a coalition of other attorneys general throughout the country "insisting that the DoE provide them with information needed to deal with these abuses."

4. Payday loans

One big item on the administration's agenda is for the CFPB to roll back a key provision of a lending rule.

The rule was established to protect people who take short-term, high interest loans, commonly called payday loans. Today, payday lenders must follow underwriting requirements, review pay stubs and confirm borrowers are able to pay back the loans before the loans are made.

Rolling back the rule means lenders would not be required to do that anymore.

"It's a sad day for low-income consumers who unfortunately sometimes depend on payday lenders to make ends meet at the end of the month," Greenberg said.

Payday loans are currently illegal in New Jersey and a few others states with laws that limit the rate of interest that can be charged.

But New Jersey borrowers can still fall victim if they apply online, Salowe-Kaye said.

5. Fuel efficiency/clean cars

Environmental regulations are another target of the Trump administration.

Specifically, fuel efficiency.

"Under the Obama administration, there was a deal struck to get most vehicles to 54.5 miles per gallon by 2025," Greenberg said. "When the Trump folks came in at the Environmental Protection Agency, they decided to drastically weaken this, freezing fuel efficiency at 37 miles per gallon."

The higher efficiency, which would have nearly doubled the current standard, would have both limited greenhouse gas emissions and saved consumers $100 billion, said Robert Weissman, president of Public Citizen, a nonprofit consumer advocacy group.

There are plenty of other regulations and laws that have been changed to the detriment of consumers. Which ones are on your mind? Share with us in the comments section.

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