So he won. Whether his election is good for America or not remains to be seen. But we have a pretty good sense that it won’t be good for consumers. Throughout the debacle that masqueraded as a political campaign, Trump threatened many important and hard-fought consumer protections, such as the Consumer Financial Protection Bureau and the Dodd-Frank Wall Street reform. Trump hasn’t provided specifics on any meaningful policies that would protect consumers. No surprise; he’s aggressively pro-business and dismissive of consumer protections. In fact, his opposition to the proposed AT&T buyout of Time Warner is driven more by a desire for leverage over CNN than to protect consumer choice.
Trump’s disinterest in consumers is typified by his attitude towards the Federal Trade Commission, a federal agency dedicated to protecting consumers. This agency is headed by five commissioners. Yet, as of February 2018, only two commissioners remain and Trump has not yet filled the three vacancies. He has nominated Joseph Simons to head the agency; he’s a lawyer who has spent his career representing large corporations such as Microsoft, AT&T and Mastercard, who have been accused of anti-competitive activities. So Trump will be able to remake the agency, which has responsibilities over consumer protection and policing anti-competitive business practices, like the employing of monopoly power. Outside of the Justice Department’s Antitrust Division, no government agency is more responsible for competition policy than the FTC. But for the first 12 months of the Trump Administration, this essential consumer agency has been operating with a skeleton staff and no leadership.
When you factor in the rip-offs that were Trump University, Trump Steaks, Trump Condominiums and his general disdain for the rule of law, consumer protections are likely at risk with the upcoming Trump Administration. We’ll be watching his actions on behalf of consumers for the upcoming four years (if he makes it that far) and chronicle his actions at this page. And for those thinking that we’ve coined a new word, check out the dictionary. The word trumpery is defined as “something without use or value; rubbish; trash; worthless stuff.”
With hopes for the best and expectations of the worst kind, here we go……………………………….
- Consumer rights? What’s that? “The Trump administration is absolutely decimating consumer rights,” said Prentiss Cox, an associate law professor at the University of Minnesota is quoted in the LA Times. “We’ve never really seen another administration that’s so blatantly hostile to the idea of the government protecting consumers.” Adds Sally Greenberg, executive director of the National Consumers League. “The unraveling of generations of consumer rights and protections is unprecedented in this (Trump) administration.”
- In the midst of Trump’s full-frontal attack on federal regulation comes an eye-opening analysis which finds that a troubling trend of declining dynamism in the U.S. since 1980—along with wage stagnation, rising inequality, and a host of other ills—has no connection to regulations. In fact, the culprit appears to be a rise in monopolization or market consolidation. New York Times columnist Eduardo Porter described it in a February 2018 article: “By allowing an ecosystem of gargantuan companies to develop, all but dominating the markets they served, the American economy shut out disruption. And thus it shut out change.” This monopolization trend can be traced back to the Reagan Administration efforts to scale back enforcement of antitrust law. As noted recently by the Washington Monthly, the loss of economic dynamism is a consequence of deregulation, not overregulation. And it has disturbing ramifications for the U.S. long-term economic health.
- A marketplace is only as healthy as the quality of information available to retailers and consumers. In this information age, Google and Facebook fueled data collection has improved the quality of information available to retailers. However, it’s a tougher slog for consumers and Trump is going to try to make it even harder. The CFPB’s complaint database is an excellent source of information about financial retailers. However, media reports suggest that Trump’s interim administrator of the consumer bureau wants to turn off the lights on this database and make it inaccessible to the public. Mulvaney is quoted as saying that there’s nothing in the law that compels the consumer protection agency to run a “Yelp for the financial industry”, and therefore he wants to shut it down.
- The federal Consumer Action Handbook — the “consumer bible” with contact information for consumer agencies and corporate consumer affairs departments nationwide — has been discontinued by Trump’s General Services Administration. Created during the Kennedy Administration in the early 60s, as a way of keeping consumers educated about their legal rights and recourse. Even the PDF version online is being killed off. Here is a link to the final 2017 version.
- The Death of Truth? Independent fact checkers have some bad news about our country’s leader: he’s made, on average, 5.5 misstatements of facts (or lies) in the first year of his presidency. And the lies are not small white lies. The New York Times list is sobering and, perhaps necessary reading. Politifact, the Pulitzer Prize winning fact checker, has a list of over 200 major lies compiled in just the first year of his administration. The reason this relates to consumer protection is that Trump has repeatedly made statements about what he’ll do and what he believes that have been proven to be false. The most recent 2018 year-end assessment of Trump’s penchant for fabrication is soul-shakingly shocking. The Fact Checkers over at the Washington Post has compiled a list of over 7,600 untruths during his two-year presidency. But 2018 was far worse than his first year. When 2018 began, the president had made 1,989 false and misleading claims. However by the end of 2018, Trump had accumulated more than 5,700 factually unsupportable statements — averaging more than 15 erroneous claims a day during 2018. That’s almost triple the rate from this first year in office.
- Worse yet, the Trump Administration has installed operatives who are actively shredding environmental, drug safety and higher-education protections.
- A scathing new report from the U.S. Department of Education’s internal watchdog (Office of Inspector General) documents how the department’s student loan unit failed to adequately supervise the companies it pays to manage the nation’s trillion-dollar portfolio of federal student loans. The report also rebukes the department’s office of Federal Student Aid for rarely penalizing companies that failed to follow the rules. Instead of safeguarding borrowers’ interests, the report says, FSA’s inconsistent oversight allowed these companies, known as loan servicers, to potentially hurt borrowers and pocket government dollars that should have been refunded because servicers weren’t meeting federal requirements. Even when the department found evidence of widespread servicer error, the report says, federal officials were reluctant to demand a refund from servicers or to penalize them by scaling back future contracts.
- The Office for Access to Justice has been effectively (and quietly) shuttered. This Obama-established office was created to increase and improve legal resources for indigent litigants in civil, criminal and tribal courts. The New York Times reports that Attorney General Jeff Sessions cannot close the office without notifying the Congress, so, instead he has defunded it. Its offices now sit dark on the third floor of the Justice Department building. The staff of a dozen or so has dwindled and left the department over the past few months. Recently, the acting director of the department has left the Justice Department, so it no longer has any employees designated to fill the important role.
- Trump advocated, and succeeded, in killing mandatory arbitration reform. VP Mike Pence cast the decisive vote in the U.S. Senate and Trump signed a bill that blocked the CFPB rule allowing class action suits against financial firms. The CFPB rule would have blocked mandatory arbitration clauses in some cases, potentially allowing millions of Americans to file or join a lawsuit to press their complaints. The Senate voted 51 to 50 to block its implementation. Pence cast the final vote in favor of the measure shortly after 10 p.m. House Republicans already passed legislation to block the rule, which now needs the approval of President Trump. In short, the banks won. Consumers lost…..for now.
- Trump, and the Republican Party, continues to try to strip the Consumer Financial Protection Bureau of many of its powers. The Washington Post reports that Republicans plan to cut back the agency’s rulemaking authority and enforcement powers and also to eliminate its consumer education functions, despite the Bureau’s successes in returning billions of dollars to bilked consumers since it was created in 2011. Its regulators exposed the scandal of Wells Fargo employees creating fake accounts. Just last week, the Bureau fined MasterCard and RushCard $13 million for glitches that denied holders of prepaid debit cards access to their cash.
- Consumer advocates have long called for limitations on overdraft fees, warning that prepaid cards were becoming credit services. Notably, prepaid debit cards are disproportionately used by low-income people. In May, over 100 consumer advocates from 36 states across the country traveled to Washington, D.C. to urge lawmakers in Congress to oppose legislation that would weaken the Consumer Financial Protection Bureau and undermine its proposed rules to limit high-cost payday loans and forced arbitration, as well as another piece of Republican legislation that creates roadblocks against all new health, safety, and pocketbook protections.
- In November 2017, Trump appointed CFPB adversary Mick Mulvaney to head up the agency he has previously dismissed as “anti-capitalist”. The New York Times has begun documenting Mulvaney’s efforts to defang this consumer protection agency. The Washington Post is also chronicling the dismantling of this important consumer protection agency…..and it’s ugly. One of the first actions by Mulvaney was to force his agency to abandon a full-scale probe of how Equifax Inc failed to protect the personal data of millions of consumers. Mulvaney has declined to order subpoenas against Equifax or sought sworn testimony from executives, routine steps when launching a full-scale probe. Meanwhile the CFPB has shelved plans for on-the-ground tests of how Equifax protects data, an idea backed by his predecessor Richard Cordray. Ugh!
- In the 137 days since Mulvaney took over the CFPB, this government agency has yet to initiate or take ANY enforcement action. From an average of 2-4 actions per month, the agency has taken no enforcement actions from November 21, 2017 through April 10, 2018. None. Meaning it has imposed no fines or penalties, required no fixes or redress, and filed no lawsuits against bad actors.
- No surprise, then, that Trump’s CFPB is deep-sixing bad behavior by lenders. In a December CNN report, it was revealed that the agency hid a report showing that banks charged high fees to college students who opened accounts and held debit cards — and that Wells Fargo charged more on average than any other financial institution. The Consumer Financial Protection Bureau report documented evidence that the nation’s largest banks were ripping off students on campuses across the country by saddling them with legally dubious account fees, bureau leadership suppressed the publication of a report prepared by bureau staff. Seth Frotman, the former student loan ombudsman at the Consumer Financial Protection Bureau, had accused agency heads of burying the report when he quit in protest earlier this year. It turns out, he was right. Even worse, the Department of Education was provided the CFPB report over a year ago, but also kept it quiet and never acted to protect students.
- Want to know how much airlines charge for baggage fees before you buy a plane ticket? Trump apparently doesn’t want you to know about it. Obama put rules in place to force air carriers to disclose baggage fees, along with how much revenue they make from charging other ancillary fees. The Department of Transportation (DOT) posted a notice on the Federal Register in December withdrawing both requirements. When buying a ticket from an airline’s website or through a third-party agency like Expedia or Orbitz, airlines will no longer have to display baggage costs. So what you pay for that ticket may be less than what it will ultimately cost you. Currently, airlines are not required to report how much they charge for “optional” services, such as carry-on bags, seat selection and priority boarding and the DOT action will reverse the proposed Obama-era rules that would have forced that disclosure. Sad!
- In December, Trump announced plans to slash funding at the Office of Financial Research (OFR), which was created by President Obama after the financial crisis. Its role is to be the Treasury Department’s eyes and ears on the financial markets. That way the Treasury can monitor financial markets and spot any new vulnerabilities rather than be blindsided, like what happened in 2008. Trump would apparently prefer regulation with blinders. Trump has talked about cutting the office’s budget by about a quarter and slashing the number of employees the office has by more than a third. It’s director, whose term ends in 2019 announced last month that he’ll be leaving by the end of this year. No replacement has been appointed by Trump.
- The National Law Review reports about the changes in anti-trust enforcement that are occurring under the Trump Administration. For example, the Department of Justice is changing the way in which it analyses horizontal transactions. In June 2017, DOJ approved the Dow/ Dupont merger despite the fact that the European Anti-Trust Commission had previously concluded that this merger raised innovation concerns, and required the divestiture of research and development assets for new crop protection chemicals. Similarly, DOJ is changing the way in which vertical mergers are evaluated. According to the new head of anti-trust enforcement at DOJ, the Department is expected to “return to the preferred focus on structural relief to remedy mergers that violate the law,” thereby limiting the use of behavioral remedies in the case of vertical transactions, where such remedies have historically been common. Not surprisingly, this is an almost 180 degree difference from how mergers were reviewed by the Obama Administration.
- Trump’s “America First Energy Plan,” published recently, appeared to focus almost exclusively on increasing fossil fuel production and rejuvenating the coal industry. It states: “the estimated $50 trillion in untapped shale, oil, and natural gas reserves, especially those on federal lands that the American people own.” Not a word about renewable and/or solar power despite the fact that in 2015, new installations of solar power capacity surpassed both wind and coal for the second year in a row, accounting for 32% of all new electrical capacity, according to a new report from GTM Research. Sure enough, on March 28th, Trump directed his federal agencies to relax carbon emission restrictions and allow for more coal production. His order effectively blocks the 2015 Paris Agreement commitment made by the U.S. cut its carbon emissions about 26 percent from 2005 levels by 2025. Trump’s big lie: that it will restore jobs for coal miners. In fact, very few jobs will likely materialize. As explained by the Wharton School of Business, Trump’s orders is a gift to the large coal companies, but not much else. If a picture tells a thousand words, then this picture, below, tells a horror story!
- Trump’s FCC appointees have repealed the important Net Neutrality protections created during the Obama Administration. How they did it is about as ugly a story as you’ll read about the political process. The New York Attorney General has begun an investigation into the debacle.
- Privacy is now at risk in a move by Congress to overrule current FCC privacy rules. Specifically,your wireless company and in-home broadband (ISP) providers can potentially see what sites you actually end up visiting and when you visit them. Mobile carriers track your location and could keep tabs on how much time you spend using different apps. And they can sell that information to the highest bidder. The current FCC rules, which have yet to go into effect, ban internet service providers and wireless carriers from selling many types of customer data—including web browsing history, location, and health information—unless you explicitly opt in. But Republicans in the Senate want to overturn those FCC rules. The plan, according to Politico, is to use a seldom used law to overturn federal regulations within 60 days of when they take effect as well as to ban the FCC from passing similar rules in the future. Nasty stuff. Congress has just passed a bill that will allows Internet companies to sell your data about websites you’ve visited and other activities that you’ve engaged in, as well as hijacking your search queries and redirecting you to a place customers hadn’t asked for, snoop through your traffic, record what you’re browsing, and then inject ads into your traffic based on your browsing history, impose “Carrier IQ” on your computer so that your ISP could also see what encrypted (HTTPS) URLs you visit and record what apps you use, and inject your computer with “supercookies” that allows anyone—not just advertisers—to track you as you browsed the web. Even if you cleared your cookies, advertisers could use your ISP’s tracking header to resurrect them, which led to something called “zombie cookies.” This bill is headed to the White House and all indicators is that Trump is going to overturn 8 years of consumer Internet protections and sign this misguided bill.
- Talking about privacy…….it’s going to get a big test in the courts thanks to the Trump Administration. At issue is whether a government employee loses the First Amendment right to free expression. Trump’s Department of Homeland Security is trying to force Twitter to cough up the identity of a government employee who is anonymously criticizing Trump in a Twitter feed. In response to a demand by DHS to turn over the identity, Twitter filed a lawsuit in Northern California, asking the court to prevent it from being forced to unmask an anonymous user of an anti-Trump account. According to Twitter’s suit, US Customs and Border Protection has attempted to use a “limited-purpose investigatory tool” to unmask the owner of the Twitter account “@ALT_uscis.” The account, one of several “alt” accounts that appeared in the wake of Trump’s victory, “to express public criticism of the Department and the current Administration,” according to Twitter’s complaint. In the suit, Twitter writes that @ALT_uscis has purported to be a dissenting member of US Citizenship and Immigration Services. Twitter filed the lawsuit against DHS and federal government employees as a way to prevent them from unmasking the identity of the account user. The American Civil Liberties Union indicates that it is representing the anonymous Twitter user. This will be an important legal test to resist the Trump doctrine of fighting back against any criticism of his administration. This case is a must-follow for any governmental employee who plans to exercise their First Amendment rights.
- The EPA’s Energy Star program to promote energy efficient appliances was described by former EPA Administrator Christy Todd Whitman under George W. Bush as “a no-brainer. It worked, and it hardly cost any money.” Yet, the Trump Administration is reportedly looking to kill the long-standing and very successful federal program. In his proposed budget, Trump has proposed defunding the 25-year old program. A Los Angeles Times article states: “Energy Star has been a pillar of the federal government’s effort to fight climate change, with the EPA boasting that it has kept some 2.8 billion tons of greenhouse gas from escaping into the atmosphere — or roughly the equivalent produced from powering 36 million homes with electricity each year. It has enabled consumers and businesses to cut their energy bills more than $30 billion per year. At an annual cost of $60 million to taxpayers, it is easily the cheapest and least burdensome initiative the federal government runs to help Americans lower their energy consumption.” Trump’s EPA advisor is quoted as justifying the program defunding because it: “is pushing companies to place too much focus on efficiency, saying it leaves consumers with inferior products to choose from.” A final word from former EPA head Whitman pretty much says it all: “The kinds of cuts they are making are scary.”
- Enough experts have weighed in on the disaster that is the House-passed “Trumpcare” replacement of Obamacare. We don’t need to go into details about this so-called healthcare overhaul, other than to refer to Paul Krugman who not only assails the bill from a policy perspective but digs down into the sheer dishonesty of this bill. Just the fact that it was pushed through the House without giving the Congressional Budget Office a chance to estimate its costs, its effects on coverage, or anything else is head-shakingly ugly. Krugman calls it a “Freedom is Slavery, Ignorance is Strength moment. And it may be the shape of things to come.” Fortunately, there are no signs that the Republican-controlled Senate will accept this legislation. So while the House Healthcare Deception is DOA, it has revealed some ugliness that even professional politicians found troubling.
- When do “alternative facts” get scary? One example of Trump’s loose grip on reality is a June 2017 tweet in which the president claimed: “When Obamacare was signed into law, CBO estimated that 23 million people would be covered in Obamacare’s exchanges in 2017. They were off by more than 100 percent. Only 10.3 million people are covered by Obamacare.” He went on to assert: FACT: when #Obamacare was signed, CBO estimated that 23M would be covered in 2017. They were off by 100%. Only 10.3M people are covered.” This tweet was intended to discredit the reputation of the Congressional Budget Office, which has found that both the House and Senate versions of health care “reform” or “repeal” would adversely affect over 20 million Americans. PolitiFact found that Trump’s tweet was, at best, half true. The nonpartisan fact-checking site reports that “To make its case that the CBO is unreliable, the Trump administration cherry-picked a statistic that CBO got the most wrong. The forecasters were closer to actual results on other major components of Obamacare, including Medicaid and employer changes. Furthermore, the tweet’s math was off: the CBO missed the mark on exchange enrollments by 55 percent, not 100 percent.” What is concerning is that Trump impugned the reputation of this very important office not because it had a methodological basis to question the CBO’s veracity but because the CBO didn’t tell Trump what he wanted to hear. And that’s scary.
- Why should you know Hui Chen? Because she’s a very smart, capable attorney who has publicly blasted her boss. Oh yeah, her boss is Donald Trump. And her beef is that his minion won’t allow the Department of Justice to do its job monitoring corporate compliance with consumer laws. She was hired in October 2015 as the first-ever compliance counsel for the Fraud Section of the Justice Department, to help prosecutors evaluate the compliance programs of companies under investigation. Chen quit that post one week ago, saying that the Trump Administration’s own ethical shortcomings made her position too difficult. She knows what she’s talking about because she wrote the Justice Department enforcement rules relating to effective corporate compliance programs. Her job was to make sure that corporations who had negotiated agreements with prosecutors were following through on their commitments to stop violating laws. She quit in June 2017 and then went public about why she left this important position. Among her damning observations: “To sit across the table from companies and question how committed they were to ethics and compliance felt not only hypocritical, but very much like shuffling the deck chair on the Titanic. Even as I engaged in those questioning and evaluations, on my mind were the numerous lawsuits pending against the President of the United States for everything from violations of the Constitution to conflict of interest, the ongoing investigations of potentially treasonous conducts, and the investigators and prosecutors fired for their pursuits of principles and facts. Those are conducts I would not tolerate seeing in a company, yet I worked under an administration that engaged in exactly those conduct. I wanted no more part in it.” and “My ability to do good at a more micro-level, by exchanging ideas with the compliance community on ways to assess the effectiveness of compliance programs, was severely limited.”
- Trump’s Department of Energy (DOE) has announced its intent to pay billions of dollars to coal and nuclear plant owners (mostly utilities and hedge funds). The DOE has proposed a new rule that would provide full cost recovery for merchant coal and nuclear plants with 90 days of fuel supply onsite in an attempt to keep the baseload plants online and operating. DOE claims it is necessary to ensure sufficient generation for the national electric grid. The truth is that these overpriced baseload plants shouldn’t be getting guaranteed recovery. Moreover, the grid flow argument is bogus; disruptions of power supply due to “fuel supply emergencies” represented just 0.00007% of the power outages reported from 2012-2016, primarily due to a coal plant in Northern Minnesota. The rulemaking and its short 60-day timeframe has sparked widespread anxiety in the power sector, with former FERC regulators warning the proposal could “blow up” wholesale power markets. Former FERC Chairmen Pat Wood III (R), Joe Kelliher (R), James Hoecker (D), Betsy Moler (D) ,Donald F. Santa, Jr. (D), Linda Key Breathitt (D) and Nora Mead Brownell (R) and Jon Wellinghoff (D) submitted a letter asserting that the DOE proposal would “fundamentally distort” wholesale power markets, undermining investor confidence and thereby harming grid reliability. DOE head Rick Perry (yeah, former governor of Texas) offered a headshakingly dumb defense of the rule: “I think you take costs into account, but what’s the cost of freedom? What is the cost to build a system to keep America free? … the idea that there is a free market in the energy industry is a fallacy.”
- Trump has appointed his budget director Mick Mulvaney to take over the CFPB. Mulvaney is a hard-core Tea-Party Republican who is on record for opposing the creation of the agency that he will now lead. (You may remember him from the time he told reporters that Meals on Wheels “doesn’t work.” Or his flailing attempts to redefine the word compassion to mean cutting programs that help the elderly). There’s little doubt that this fox will be focused on dismantling the hen house he’s supposed to run.
- Trump’s EPA placed a top scientist on administrative leave after she authored an email critical of EPA decisions. The New York Times reported in October 2018 that Dr. Ruth Etzel, a pediatrician and epidemiologist who has been a leader in children’s environmental health for 30 years and previously a senior officer for environmental health research at the World Health Organization, had been forced into an administrative leave. The EPA would not divulge the reason for its action, but the step was decried by industry observers. Dr. Etzel runs the the Office of Children’s Health Protection. Created by President Bill Clinton in 1997, it advises the E.P.A. leadership on the specific health and environmental-protection needs of children, which often leads to tougher or more stringent regulatory standards than those that might be required for adults. She is highly regarded in her field and her analysis of blood tests in Flint, Mich., a community that became caught up in a lead crisis affecting its drinking water, is cited as key in proving that Flint residents were being poisoned by the lead. For now, she’s out and the office she headed is in a regulatory limbo. The office’s proposal for reducing childhood lead exposure, which had been in development for more than a year with the involvement of 17 federal agencies has been stalled since early July 2019. Another one of her initiatives, which bars farm workers under the age of 18 from applying the most toxic pesticides to fruits and vegetables, has also been under attack by Trump’s EPA appointees.