Trump’s First 100 Days: Weakening Consumer Protections for Student Loan Borrowers

By Amelia Collins, Policy Analyst, NCLR

The president proposed an ambitious student debt plan during the campaign last year. He called student loan debt an “albatross” hanging on the necks of borrowers, proposed a generous and streamlined repayment plan, and stated that the government shouldn’t “profit” off its student loan program. However, instead of using the first 100 days of his presidency to follow through on these promises, President Trump and Secretary of Education Betsy DeVos have rolled back crucial consumer protections for our nation’s 40 million student loan borrowers.

Let’s set the stage.

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D.C. Circuit Court Decision Is a Victory for Consumers

By Renato Rocha, Policy Analyst, Economic Policy Project, NCLR

Yesterday, the United States Court of Appeals for the D.C. Circuit agreed to rehear a case, PHH Corp. vs. CFPB, that would have seriously weakened the efficacy of the Consumer Financial Protection Bureau (CFPB).

Last October, a three-judge panel attempted to make it easier to remove the director of the consumer agency, allowing the president to fire the director at will. The full federal appeals court decided that it will revisit the issue at a hearing in May, effectively scrapping this earlier decision, and allowing the CFPB’s structure to continue as Congress intended.

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Three Key Findings on Hispanics with Debt in Collection: Results from CFPB’s Recent Survey

By Renato Rocha, Policy Analyst, Economic Policy Project, NCLR

Photo: Pictures of Money

Debt collection in the Latino community is a critical consumer protection issue for one of the nation’s largest and fastest-growing communities.

Latino families need access to affordable credit but have been historically excluded or discriminated from accessing safe financial products. The FDIC’s 2015 Survey of Unbanked and Underbanked households indicated that a result of this persistent economic injustice is that Latinos and other consumers who have been outside the financial mainstream are vulnerable to financial shocks, such as health-related expenses or job loss. Having been sidelined from affordable products, Latinos have little choice but to turn to more expensive credit to pay for their expenses. For example, 39 percent of Hispanic households used an alternative financial product (such as a payday loan) in 2015, compared to just 17 percent of White households.

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How Congress Intends to Rollback Protections for American Workers

By Amelia Collins, Policy Analyst, NCLR

Photo: Roman Boed

Starting this week, the 115th Congress began work dismantling public protections for American workers, consumers, and families. NCLR has a history of being active in the regulatory process with significant success. This includes a final overtime rule that will benefit two million Latino workers, and a rule ensuring that retirement advisors make decisions in their client’s best interest. These rules will help millions of Latinos and other workers get more for their hard work.

So why would Congress want to eliminate these and other crucial protections? Well, some say that regulations cost the economy jobs and stymie growth. However, recent economic trends suggest otherwise:

  • The economy is on a record of 75 consecutive months of job growth.
  • Unemployment is down to 4.7% from a pre-recession peak of 10%, and wages are rising.
  • Median household income increased in 2015 and poverty rates fell, with the Latino poverty rate being the lowest since 2006.

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CFPB on a Roll—Next Up: Abusive Debt Collection Practices

By Renato Rocha, Policy Analyst, Wealth-Building Initiative

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Photo: Sean MacEntee

Having proposed a rule last month to protect consumers from the payday lending debt trap, the Consumer Financial Protection Bureau (CFPB) has its next target on the debt collection industry. With the passage of the Federal Debt Collection Practices Act (FDCPA) nearly 40 years ago, Congress set out to eliminate abusive debt collection practices. It held that unfair practices lead to personal bankruptcies, marital instability, job loss, and invasion of privacy. Not until the enactment of the Dodd-Frank Act in 2010, however, was a federal agency authorized to issue comprehensive regulations to implement the FDCPA. In an effort to protect and improve the financial well-being of consumers, the CFPB today outlined new debt collection rules.

Since the passage of the FDCPA, the debt collection industry has experienced dramatic growth. Currently, debt collection is a multibillion-dollar industry made up of a network of first- and third-party collectors, debt buyers, collection law firms, and millions of affected consumers. Approximately 70 million people (one in three consumers) has a debt in collection. Thousands of collection firms exist, generating about $14 billion in revenue.

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