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Watchdog groups decry "attack" on consumer protections

Trump rolls back Dodd-Frank
How Trump rolling back financial regulations may impact consumers 01:54

A broad array of prominent consumer groups is heading to Washington D.C. this week to lobby against what they see as an unprecedented assault on financial protections for average Americans. 

"There is an attack of consumer rights going on that needs to be stopped," said Michael Best, senior policy advocate for the Consumer Federation of America (CFA). "We need to get consumers' voices heard."

More than 137 advocates representing CFA, Consumers Union, U.S. PIRG, National Consumer Law Center, National Consumers League and a variety of other groups plan to meet lawmakers to oppose two bills that the groups consider particularly damaging.

One, called "The Choice Act," would weaken the Consumer Financial Protection Bureau by hindering its ability to directly fine companies for breaking the law and order them to provide refunds to defrauded consumers. Under current law, the agency may unilaterally impose financial penalties; the Choice Act would allow companies to challenge such fines in court. 

The bill would also politicize the agency by making its operation subject to the congressional appropriations process and its director beholden to the president. The agency currently receives fixed funding through the Federal Reserve System, while its director cannot be fired without cause.

Created by the Dodd-Frank financial reform law that was passed in the wake of the 2008-09 financial crisis, the CFPB has returned nearly $12 billion to some 29 million victims of financial wrongdoing in its five-year history, according to the liberal-leaning Center for American Progress.

The Choice Act "neuters this critical consumer watchdog and would leave Americans more vulnerable to getting hit with hidden fees, costly scams and financial fraud," said Pamela Banks, senior counsel for Consumers Union.  

A House panel last week approved legislation that would undo much of Dodd-Frank. Republicans argue that the law is hindering economic growth by discouraging banks from making loans and raising compliance costs for financial firms.  

In addition, the groups aim to derail the so-called "Regulatory Accountability Act," which passed the House in January. Advocates of the proposed law said it would eliminate "burdensome government red-tape." 

The Coalition for Sensible Safeguards said the law "would cripple the process for issuing and enforcing regulations that ensure we have clean air and water, healthy food, fair wages and safe workplaces" by requiring government agencies to conduct cumbersome tests aimed at protecting corporate profits over consumer safety.

"Consumer leaders from around the country are bringing members of Congress a strong message," said Janet Domenitz, director of the Massachusetts Public Interest Research Group. "Don't weaken the CFPB and don't roll back our financial and public health protections."

Hoping to mobilize additional grassroots support, the groups said they will be tweeting consumer stories and the results of their meetings @#consumersrising2017.

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