Enacted Changes Under the Trump Administration
Traditionally, defining abusive acts or practices within the financial industry has been far from straightforward, challenging, and subjective. Acting Director Kathy Kraninger sought to give the financial industry clearer guidance following this event by defining an “abusive” act or practice as “One in which the harm to consumers outweighs the benefit.” Kraninger also indicated that the CFPB would focus on stand-alone violations of the abusive standard rather than combining abusiveness findings with unfairness or deception violations. The Bureau received backlash for this statement as advocates saw this as an attempt to limit the agency’s authority and accountability towards supporting consumers. Kraninger intended to shift the focus from financial protection to financial literacy for consumers.
In a 2019 study by the Consumer Federation of America, using a 2015 baseline for comparison, enforcement actions during the Trump Administration plummeted by 80%, suggesting a less strict Bureau. During Trump’s 2016 campaign, he promised to roll back the Dodd-Frank Act by deregulating banks. His overall goal was to free up banks to do more business and let smaller banks off the hook, allowing for more lending and saving money on stress testing. Indicating, banks with less than $250 billion in assets would no longer be subject to regular stress tests.
Overall, under the Trump Administration, the policies enacted forced consumers to have more responsibility for their financial limitations, retracting the support and guidance set forth by implementing the CFPB. Although the CFPB found itself less engaged with consumers and abandoning enforcement on financial companies under the Trump Administration, consumers continued to seek assistance.