By Anastasia Christman, National Employment Law Project
This week, Mick Mulvaney, the interim head of the Consumer Financial Protection Bureau—the agency created specifically to help customers who report bad bank behavior—announced he may take down the publicly available database of more than one million complaints of everyday customers against big banking interests.
Mulvaney, who tried mightily to kill off the agency when he was a congressman, has stated that the CFPB’s new guiding principle will shift to “humility” rather than vigilance, and its mission will move to identifying what it believes are “burdensome” regulations. In his speech to banking executives, Mulvaney revealed that as a congressman, “If you were a lobbyist who gave us money, I might talk to you.”
And the banking lobbyists have been giving money, indeed. In the latest giving cycle, the commercial banks have written checks averaging $43,600 to members of the House Financial Services Committee, though that average is heavily skewed by the fact that seven of the Republican members already owe thank you notes for contributions of more than $90,000. Lawmakers who penned an open letter in 2017 calling for termination of the last, more vigorous CFPB head, had received a combined $2.3 million in campaign contributions from the financial sector. The four representatives who co-sponsored a bill to turn the CFPB from an independent agency into a “bipartisan commission”—two Republicans and two Democrats—have together received more than $2 million from the commercial banking and investment industries in their careers, and Mulvaney himself accepted more than $200,000 from banking lobbyists when he was a sitting congressman. As nearly two-thirds of all lobbyists for the commercial banking industry previously worked for the federal government, personal connections can open doors even where campaign contributions can’t.
As of early April, just over 68,000 complaints were filed with the CFPB this year: thousands of everyday customers appealing for help when they can’t get information about a dispute on the phone, when an interest rate jumps for no reason, when they discover an account was mysteriously opened in their name, or when they can’t stop unauthorized withdrawals from their accounts. “I’m asking again for documentation with my signature on it…I have never even been to this company,” wrote one customer from North Carolina. In Alabama, a customer reported, “The company I bank with…won’t stop posting and clearing debit transactions I already paid for,” while another in California bemoaned multiple insufficient funds charges on accounts she had repeatedly tried to close.
The Trump tax changes will bring a windfall to these banks. Analysts predict that this year alone, the banks should book $7 billion as their tax rates drop. This money could be going to raise wages or provide more training to frontline workers to improve customer service. But except for some one-time bonuses and small raises for some of the lowest-paid employees, that’s not happening.
In 2016, we conducted interviews with nearly seven dozen banking workers across the country, and in our resulting report, Banking on the Hard Sell, we shared their stories of extreme pressure to sell unnecessary products—sometimes fraudulently—in order to supplement low hourly wages with incentive bonuses. In a forthcoming study analyzing the responses of more than 400 banking workers to a survey, we find that reports of the death of these aggressive practices have been greatly exaggerated. Workers tell us that only 14 percent of their current performance goals are based on customer satisfaction, with almost a third based on numbers of contacts and phone calls. Many workers report that they do not see a clear path to advancement in their workplaces, they regularly worry about making ends meet on their pay, they still feel pressure to sell multiple banking products to customers, and that training is spotty in both quality and quantity.
In the past decade, we’ve seen banks profit off fraudulent mortgage loans, exorbitant overdraft fees, aggressive sales of unneeded products, unwanted auto insurance, and illegal repossession of active service members’ cars, not to mention racially discriminatory provision of banking services, discriminatory pay practices, and hiring discrimination. In the immediate aftermath of a recession that bankrupted millions, policymakers and regulators understood that everyday banking customers needed protection against this constant drive toward revenue at any cost—an understanding that is now giving way to acquiescence to industry-led demands, lobbying, and campaign cash for looser oversight over whatever profits they pursue next. The banks saw a massive windfall in the Trump tax changes, and it seems that much of this new revenue will go toward ensuring reduced public scrutiny, even less regulatory oversight, and free rein to return to business as usual.