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A Washington Post column highlighted the latest attempt by congressional Republicans to weaken the Consumer Financial Protection Bureau (CFPB), a longtime target of the banking lobby and right-wing media outlets intent on unwinding public protections put in place after the financial crisis.
On April 21, Washington Post financial columnist Michelle Singletary called attention to an attempt by Republican lawmakers to block new protections from the CFPB that would give prepaid card users federal guarantees similar to those afforded to credit and debit card users. Prepaid cards, which are not attached to bank accounts, are often used by customers without access to financial services, but they currently offer few protections for consumers. Some of the new protections authorized by the CFPB include requiring institutions to investigate fraud charges, granting cardholders access to account balances, and mandating that fee information be “upfront and clear.” Singletary pointed out the absurdity of Republicans’ position that they “don’t think prepaid cards deserve the same protections” as credit and debit cards and chided their “ridiculous” complaint that fee transparency might help consumers reduce their costs. From the Post:
On this issue, it comes down to this: Opponents of the new rules object to helping people who can least afford a whole bunch of fees so that card companies can make more money off them. It’s an example of putting business interests first and the interests of the nation’s most financially vulnerable consumers last.
On April 21, the right-wing website The New American published a column by conservative commentator Veronique de Rugy slamming the new CFPB rules, claiming these basic protections are an attempt to strangle innovative products with “excessive regulation.” Similar attacks on the CFPB’s prepaid card rules were pushed by conservative think tanks the Institute for Liberty, Americans for Tax Reform and the Competitive Enterprise Institute.
On April 20, the Center for American Progress (CAP) reported that roughly 23 million Americans -- or one in 10 households -- used prepaid cards in 2015 for a total of over $270 billion in transactions and pointed out the danger of blocking protections for millions of consumers. CAP’s Joe Valenti noted how bizarre the GOP’s actions are, since many major prepaid card companies do not object to these new rules, and he said the only gains to killing these rules would likely be for “companies looking to evade regulation and profit from unsavory business practices.”
The GOP’s attempt to block new public protections devised by the CFPB is the latest in a years-long assault on the agency by right-wingers hoping to curb necessary financial regulations and oust the agency’s director. These attacks have only increased with the GOP takeover of the White House, which left the CFPB as “one of the few adversaries of Wall Street” remaining in a Republican-dominated federal government