Tag Archives: Equifax

Luetkemeyer, Wagner want to help Equifax roll consumers

20 Wednesday Sep 2017

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Immediately after the recent Equifax hack that potentially put close to 150 million Americans at risk for identity theft, I wrote about how the event proved that Rep. Ann Wagner’s (R-2) bias against any regulation of the financial industry, and especially her vendetta against the oversight role of the Consumer Financial Protection Bureau (CFPB) was contrary to the interests of the everyday Americans she ostensibly serves. Surely, I thought, these folks can be made to realize that enabling more disaster in the wake of disaster may be going just a bit too far.

Well no. The concept of wise stewardship always seems to  be too difficult for the Republican brain, as evidenced by this little financial tidbit in the LA Times:

Even as millions of consumers grapple with fallout from the Equifax data breach, Republican lawmakers are quietly backing legislation to deregulate credit agencies and make them even less accountable for wrongdoing.

Bills are pending in Congress to limit class-action damages for violations of the Fair Credit Reporting Act and to give credit agencies more latitude in profiting from identity theft protection products.

The legislation is part of sweeping efforts by Republican lawmakers to reduce oversight of banks and other financial-services firms, and to cripple or eliminate the Consumer Financial Protection Bureau, which has notched a successful track record of holding industry players accountable for unfair and illegal practices.

And who’s the engineer steering this “quiet” anti-citizen effort? Why no one other than Missouri Rep. Blaine Luetkemeyer (R-3), a member, along with Rep. Wagner, of the House Financial Services Committee, and Chair of the Subcommittee on Financial Institutions and Consumer Credit, which just held hearings on the proposed legislation – possibly inspired by successful , and, for the profitable credit reporting agencies involved, expensive, oversight exercised by the CFBP in the recent past. Luetkemeyer declared that the new legislation would ” streamline regulatory requirements and eliminate inefficiencies” and “better allow financial companies to serve their customers.”

Sadly for Luetkemeyer’s credibilty, the response of the LA Times reporter, David Lazarus, is closer to the truth when he observes that what “the legislation would do is reward credit agencies with greater regulatory elbow room and diminished accountability for screw-ups.” As far as I’m concerned, they’ve got far too much of that elbow room already – as Lazarus notes:

Consumer advocates say the Equifax breach should serve as a wake-up call for Americans that the three leading credit agencies — Equifax, Experian and TransUnion — are focused primarily on earning cash from people’s personal information, not keeping such information under lock and key.

“Consumers are not customers of these companies — they’re commodities,” said Chi Chi Wu, a staff attorney with the National Consumer Law Center. “We have no say over what they do with our data.”

There are, of course, Democrats on on the Financial Services Committee and its various subcommittes; Missouri Rep. Lacy Clay (D-1) serves on Luetkemeyer’s subcommittee, for example. But they’re there as representatives of the minority party in a congress which Republicans have publicly determined to run solely in service of Republican druthers, and, given the amounts of cash that the financial industry throws at sympathetic members of these plum committee posts, the Democrats are not likely to be heard if they do stand up. Same reasons hold when considering the inevitable death march of a Democratic bill offered in response to the Equifax farce, the Freedom from Equifax Exploitation Act.

Actually, the proposed Democratic legislation, mild as it is, probably doesn’t go nearly far enough. Michael Kevin Drum who has long noted the essentially abusive nature of our credit reporting system and urged greater regulatory oversight of the credit reporting agencies, observesd last week that:

… The credit reporting agencies have gotten away forever with treating consumers like bothersome children: screwing up their credit records, ruining their lives, making it deliberately difficult and expensive to lock accounts, and making money off the whole thing by offering “insurance” against problems that they themselves cause. Someone in Congress who allegedly cares about ordinary working folks should introduce a bill to regulate the hell out of these folks. Not only is it the right thing to do, but it’s hard to think of any industry that more richly deserves it.

Well somebody in Congress does care – Democrats mainly – but a fat lot of good it’ll do us. Because financial industry toadies like Luetkemeyer and Wagner are sitting pretty in their well-funded catbird seats and they aim to keep that campaign cash cushion well-padded.

Ask Ann Wagner why, after Equifax fail, she wants to gut the CFPB?

09 Saturday Sep 2017

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The Consumer Financial Protection Bureau (CFPB) is, as it states on its Website, “a U.S. government agency that makes sure banks, lenders, and other financial companies treat you fairly. ” It was an important component of the the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), a law designed to protect Americans from the excesses that led to the financial crisis of 2008. To date the Agency has been very effective. In the few years since it was established, it has settled over a million complaints and has saved consumers more than 11 billion dollars.

So what’s not to like? An awful lot if you are part of a financial industry that got used to running wild during the Bush years. As The New York Times asserts, the CFPB may have been too effective. It has far too much independence for Big Banking’s tastes; it can operate outside the realm of strategically distributed campaign funding and lobbyist blandishment.

Needless to say, when it comes to the CFPB, Republicans have been more than willing to take up the cudgels on behalf of their patrons in the financial sector. And nobody’s been more assiduous in going after the CFPB than Missouri’s own Ann Wagner, who, not incidentally, rakes in a big part of her considerable campaign war chest from grateful banking types.

The reason I’m returning to what is now an old and, at this point, oft-told story is simple: Equifax. The Equifax data breach that has exposed at least 148 million consumers to potential ID theft, to be precise. Also the fact that Equifax botched its response to its big fail by revealing the breach belatedly, and then offering inadequate follow-up, even, according to some sources, attempting to make money off of the disaster.

But don’t worry. The CFPB is on the case:

In a statement provided to HousingWire, CFPB Senior Spokesperson Sam Gilford said the bureau is already looking into the situation.

“The CFPB has authority over the consumer reporting industry, including supervisory and enforcement authority,” Gilford said in the statement.

“The CFPB is authorized to take enforcement action against institutions engaged in unfair, deceptive, or abusive acts or practices, or that otherwise violate federal consumer financial laws,” Gilford added. “We are looking into the data breach and Equifax’s response, but cannot comment further at this time.”

Additionally, Gilford said the CFPB is looking into the arbitration clause inserted into Equifax’s credit monitoring.

As CNN points out, consumers who want to take Equifax up on its offer of free credit monitoring for a year have to waive their right to sue, something that the CFPB is currently battling over on Capitol Hill.

“Equifax’s credit monitoring product contains a mandatory arbitration clause that denies people their right to join together to sue the company for wrongdoing,” Gilford said.

True, the New York Attorney General is also launching an investigation, and Congress is promising hearings. I don’t know about you, though, but when it comes to who is more likely to be thorough and transparent, I prefer that the task be at least shared with an agency like the CFPB, whose independence is assured. Unlike some congresspersons I could name, it doesn’t have any favors to repay that might soften the zeal with which it goes after a bad actor.

The CFPB  went after Equifax and TransUnion earlier this year for deceiving consumers about the usefulness and cost of credit scores they sell. Given their record to date, I don’t need to add that the CFPB got results; it cost the credit agencies $5.5 million in fines and $17.6 million in restitution paid to consumers. The CFPB’s got a track record when it comes to Equifax and its ilk.

Of course, it’s the very independence of the CFPB that sticks in Wagner’s craw. It’s what lies behind the usual Republican charges of government overreach or, in a more grandiose vein, charges that it is not constitutional to have a government agency with so much power that is funded independently of congress and is led by an executive appointee who cannot be dismissed on the whims of various and sundry elected officials without substantial cause. So far, the courts, our constitutional arbiters, don’t agree with Wagner et al. when it comes to questions of constitutional overreach. (Do you, too, find “unconstitutional” kind of funny coming from GOP politicians who seem to be purposely blind to the constitutional issues that bedevil their current President?)

Wagner’s onus against the agency extends to its director. She has been in the forefront of trying to drum up an appearance of malfeasance on the part of CFPB director Richard Cordray, even going so far as to level poorly substantiated charges of workplace discrimination. Most recently, she and her anti-CFPB cadres have tried to besmirch the record of the CFPB investigation into Wells-Fargo’s financial malfeasance.

But right now, when a truly huge number of Americans are facing the potential of identify theft or worse, and the company responsible for losing their data is acting poorly, do you think Wagner could be prevailed upon to leave the CFPB alone and let it serve the people who need it? I’m not optimistic – it’s clear that Wagner sees the Trump presidency as a lifeline when it comes to her heretofore ineffectual crusade to re-empower our financial overlords, but maybe, nevertheless, we should ask her to “can” it? Or else.*

*Note to Ann Wagner: No, Ann, “or else” is not a threat of anything worse than an election. I know that many of your grey-haried constituents scare you silly, but you don’t need to be worried about anything worse than losing their votes.