The Consumer Financial Protection Bureau remains one of the best examples of progressive governance in the 21st century. From taking on banks to the student loan industry, payday lenders to mortgage companies, the bureau — an idea first championed by Democratic Sen. Elizabeth Warren of Massachusetts — has looked out for Americans’ interests since its inception.
As Joe Biden’s presidency neared its end, Helaine Olen explained, “Over its almost 13 years, the agency has stopped numerous financial ripoffs and returned billions of dollars to the public. Its mere existence provides an ongoing demonstration of how the government can effectively stand up to big money interests and protect the American people.”
A New York Times report added soon after that this one agency “has clawed back $21 billion for consumers. It slashed overdraft fees, reformed the student loan servicing market, transformed mortgage lending rules and forced banks and money transmitters to compensate fraud victims.”
All of those breakthroughs, of course, happened before Donald Trump took office and appointed his right-wing budget director, Russell Vought, to oversee the CFPB. As The New York Times reported this week, the agency’s direction has taken a radically regressive turn.
Under President Trump, the Consumer Financial Protection Bureau has dropped nearly a dozen enforcement cases brought during the Biden administration, ending lawsuits against banks and lenders for a variety of financial practices that the watchdog agency no longer considers illegal. But on Wednesday, the bureau went a step further: It is seeking to give back $105,000 that a mortgage lender paid to settle racial discrimination claims last fall.
The closer one looks at the relevant details, the more striking the developments appear: In Trump’s first term, the Republican president appointed Kathleen Kraninger to run the consumer bureau, and she brought a case against a Chicago-based lender that was accused of racially discriminatory practices. The effort succeeded, and the lender ultimately agreed to a settlement after losing a court fight.
Remember, it was Trump’s own administration — not the Obama administration or Biden administration — that pursued the matter.
Evidently, that didn’t matter to Vought, who concluded that the CFPB had relied on “radical ‘equity’ arguments” and the lender deserved some kind of refund.
Christine Chen Zinner, a senior lawyer at Americans for Financial Reform, a progressive advocacy group, told the Times that the consumer bureau’s attempt to overturn the settlement is “bananacakes.” Part of what makes this extraordinary, of course is the administration’s approach to housing discrimination. But it’s also striking to see the Trumpified CFPB taking steps to give money to a mortgage lender, instead of trying to get money from a mortgage lender. The next time someone suggests the Trump administration has embraced economic populism, keep this story in mind. This post updates our related earlier coverage.
Steve Benen is a producer for "The Rachel Maddow Show," the editor of MaddowBlog and an MS NOW political contributor. He's also the bestselling author of "Ministry of Truth: Democracy, Reality, and the Republicans' War on the Recent Past."
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