Consumer protection wanes under Trump, reports find

Corrections and Clarifications: A previous version of this story misidentified the Consumer Federation of America. 

Tasked with protecting Americans against harmful financial practices, the Consumer Financial Protection Bureau has taken a less aggressive approach under the Trump administration, according to a pair of new reports, one given exclusively to USA TODAY.

The bureau doled out 35 enforcement actions with fines of $5,000 or more against corporations in the first two years of the Trump administration, down from 64 in the last two years of the Obama administration, according to Public Citizen, which used a database compiled by Good Jobs First, an advocacy group promoting corporate and government accountability.

Similarly, overall enforcement activity has fallen 80 percent from the bureau’s peak productivity in 2015, and the average monetary relief to victims plunged 96 percent per case, according to a study released Tuesday by the Consumer Federation of America.

“If corporations can get away with breaking the law with no consequences, they will do it all the time,” said Robert Weissman, president of Public Citizen. “We’ve seen dramatic shifts from the relatively modest enforcement efforts by the Obama administration to the barely visible, anemic efforts by the Trump administration.”

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The protection bureau's new director, Kathy Kraninger, testified before Congress this week, facing questions about the bureau’s plans to implement underwriting requirements for payday lenders.

Consumer Financial Protection Bureau

Public Citizen noted that the bureau issued no enforcement actions for five months – from November 2017 until April 2018. Richard Cordray, who was appointed director by President Obama, stepped down at the end of November 2017.

Before that, under his tenure during the Trump administration, the bureau issued 24 enforcement actions. Since then, the bureau has handed out only 11. Before Kraninger took over in December 2018, the bureau was led by Mick Mulvaney, director of the Office of Management and Budget and acting White House chief of staff,  who was critical of the bureau created under Obama.

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“The bureau is and will continue to vigorously enforce the law. In the first two months of 2019, the bureau announced five public enforcement actions,” spokeswoman Marisol Garibay said in response to the Public Citizen report.

The Consumer Federation of America found a similar decline in enforcement activity at the bureau, especially in areas that received the highest volume of complaints from consumers such as credit reporting, debt collection, mortgage lending and student loans.

• Credit reporting: 0.09 cases a week under Cordray vs. 0.04 cases under Mulvaney
• Debt collection: 0.07 cases a week under Cordray vs. 0.02 under Mulvaney
• Mortgage lending: 0.22 cases a  week under Cordray vs. 0.04 under Mulvaney
• Student loans: 0.05 cases a week under Cordray vs. 0.00 under Mulvaney

Overall, Cordray brought an average of 0.72 overall cases a week, compared with 0.2 cases for Mulvaney and 0.38 cases for Kraninger, the federation's report found.

Consumer Product Safety Commission

Public Citizen noted a decline in enforcement activity at the Consumer Product Safety Commission, though the total number of cases overall is small. Total assessed penalties also decreased but by a less substantial rate.

In 2017 and 2018, the safety commission completed seven enforcement actions totaling $53.5 million, compared with 13 cases totaling $56.1 million in the final two years under Obama, it found.

Ann Marie Buerkle, the acting chairman of the commission, expressed her reservations about how penalties were assessed when she was commissioner.

The commission did levy its highest civil penalty ever of $27.25 million against Polaris Industries over offroad vehicle safety under her leadership, which helped add to the $53.5 million in total penalties. The largest penalty during Obama's final two years was $15.45 million against Gree Electric Appliances in March 2016. 

The safety commission noted it used other tools as well to protect consumers, including recalls, voluntary and mandatory standards and education.

“CPSC is committed to holding firms accountable for failure to report defective products and other hazards,” spokeswoman Patty Davis said.  “A focus on the number of civil penalties fails to show the complete picture and is a disservice to the public.”

Federal Trade Commission

There was a decline in activity at the Federal Trade Commission, according to Public Citizen’s accounting. The FTC completed 40 enforcement actions of $5,000 or more in the first two years under the Trump administration, down from 58 in Obama’s final two years.

One of those penalties was the $4.3 billion settlement with Volkswagen over vehicles that masked high emission levels, a case started under Obama. Excluding that, the commission assessed $427 million in penalties under Trump versus $2 billion under Obama’s last two years in office, Public Citizen found.

The figures count only the number of civil penalties, but the agency can’t always impose a monetary penalty. Its other enforcement actions include filing a complaint to federal court or bringing a case before the commission.

Adding those scenarios to civil penalties, the number of enforcement actions for consumer protection totaled 74 in 2017, 70 in 2016 and 107 in 2015, according to its annual reports. Figures for 2018 were not available.

“The FTC has been, and is, consistently vigilant in enforcing the law and protecting consumers,” spokesman Peter Kaplan said.